The government regulator for gas and electricity, Ofgem, announced in November that 34 suppliers collectively owed over £100 million in buyout payments under the government’s Renewables Obligation scheme. The scheme requires energy suppliers who don’t source the required proportion of electricity from renewable sources to pay into the buyout fund, which is administered by Ofgem. The suppliers had a limited period in which to make the late payments in order to meet their obligations.
Selkirk-based Spark Energy Supply, which was under investigation by Ofgem for its non-payment of the Renewables Obligation payments, has now become the seventh energy supplier to cease trading in 2018.
A week earlier, Extra Energy’s 108,000 domestic and 21,000 business customers also joined those already let down by Future Energy, National Gas & Power, Iresa Energy, Gen4U and Usio Energy.
Over 500,000 customers have now been let down by the seven energy suppliers, which have all ceased trading in 2018. Energy watchdog, Ofgem, has taken action by drafting measures that will take effect from spring 2019.
The new and tougher measures will assess new suppliers before they are granted a licence to supply energy, to better protect consumers against poor performance.
New suppliers will now have to provide evidence to the regulator that they have the funds and resources to manage their business for a minimum of the first twelve months. To assist vulnerable customers, they will also be required to meet Ofgem’s compliant handling standards and obligations.
Ofgem has taken action against the worst offending firms that have come bottom of the latest customer service league table, published by Citizens Advice. New firms have dominated the list.
New energy firms aren’t all bad news for consumers, though. They have encouraged more competition and innovation in the market, and helped to drive down energy prices and improved standards of customer service.
Ofgem is consulting separately on proposals to introduce new reporting requirements for current suppliers, which will include regular financial updates and reports on operational resources.
If my energy supplier goes bust – what should I do?
Ofgem’s safety net provides protections for customers’ credit balances and ensures that household gas and electricity supply is not affected.
The regulator will appoint a replacement supplier and customers can choose to switch if they find the tariff is more expensive, without paying exit fees.
You should read your meter but otherwise do not need to take any action – your newly appointed supplier will contact you.