Energy lifeboat to be paid for by customers proposed by Ofgem in case of supplier insolvency

Tracey Boles
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new energy suppliers have come to market (Source: Getty)

ENERGY customers may have to pay into a new industry lifeboat fund that will bail out customers of any suppliers that fail.

Ofgem, the energy watchdog, has proposed the reimbursement fund after a plethora of smaller suppliers joined the market.

The proposal is part of a consultation launched last month to pre-empt a potential supplier insolvency.

The number of challengers to the so-called Big Six has risen from 26 to 44 since 2014. As a result the Big Six have seen their market share fall from 99 per cent in 2012 to 83 per cent.

The regulator is said to be particularly concerned about companies that take payment up front. At present the regulator has powers to appoint a replacement supplier but wants to consider other options.

It is said to be concerned that a failure would damage confidence in the industry.

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