British energy regulator plans new rules to help customers as prices soar

(Reuters) -Britain's energy regulator on Monday proposed new measures to protect consumers and prevent energy suppliers from charging high direct debit payments as households struggle to meet soaring energy bills.

Regulator Ofgem said its measures were aimed at reducing the risk of more electricity and gas suppliers going bust, preventing a repeat of the crisis of last autumn and winter.

More than 25 suppliers collapsed last year, squeezed by record-high wholesale energy prices.

The changes proposed on Monday included limits on payments billed via direct debit, to "ensure credit balances do not become excessive", Ofgem said.

The proposed package also includes rules to protect the money of users when a company fails and customers are moved to a new supplier with credit balances, ensuring households do not have to pick up the bill.

The cost of moving customers of failed companies to new suppliers was 94 pounds ($115.08) per household, including new suppliers having to buy extra gas at short notice while prices were at record highs and replacing lost customer credit balances and green levy payments, Ofgem said.

"Today's proposals will make sure that customers' hard-earned money is properly protected so that a company must foot the bill if it fails, rather than consumers picking up the tab," Jonathan Brearley, chief executive of Ofgem, said in a statement.

Household energy bills in Britain look set to surge by another 40% in October, Ofgem warned last month, deepening a cost-of-living crisis that is piling pressure on the government to do more to help the poorest.

(Reporting by Nishit Jogi and Akriti Sharma in Bengaluru; Editing by Nick Zieminski, Subhranshu Sahu and Louise Heavens)