Energy suppliers will have to pass tougher tests before being allowed to enter the market, in new measures designed to prevent the penalty paid by consumers if they fail. When energy companies go bust, the cost of their debts has to be shared between all the other firms on the market and the bill to cover their liabilities to creditors is usually passed on to their customers. However, under the new rules, suppliers will only be allowed to set up if they have set aside a ring-fenced pot of money or come up with a concrete financial plan — which the regulator Ofgem referred to as a “living will” — that would kick in if they went out of business. Ofgem was spurred to act after eight suppliers failed last year leading to accusations that it had allowed too many suppliers to set up with insufficient checks and balances.
Times 28th June 2020 read more »
ENERGY firms are set to face tougher checks as they expand under a drive by the sector regulator Ofgem to reduce the risk of suppliers going bust and to ensure consumers don’t have to bear the cost of failures. A range of smaller players have ceased trading amid pressure on revenues following the introduction of a price cap by Ofgem last year including GnERGY, Breeze Energy and Toto Energy.
Herald 26th June 2020 read more »