Sunday 29 September 2019 3:22 pm

Ofgem looks at powers to block sales of energy customers

Energy regulator Ofgem is considering plans which would allow it to block transactions between suppliers, as the industry worries that it is being left to pick up the pieces for failed companies.

Rivals have picked the bones for left-over meat of some of more than a dozen energy suppliers that have gone bust in the last two years.

Read more: Ofgem throws lifeline to 30,000 energy customers as Eversmart goes bust

Ahead of its collapse, Solarplicity, the one of the latest casualties, sold more than 40,000 customers to Toto before closing its doors. Fellow supplier EDF agreed to take on the remaining 7,500 customers in a process run by Ofgem.

EDF will be able to claim back some of the costs of taking on these customers from the rest of the industry.

Now the head of consumers and markets at Ofgem, Mary Starks, has warned companies against selling customers in a way that might “subvert or distort” Ofgem’s supplier of last resort process.

“We are … considering whether … there is a case for strengthening our powers to veto such transactions,” she wrote to energy companies in a letter seen by the Sunday Times.

The regulator will consult on introducing a veto, starting next month, the paper reported.

Read more: Ofgem rips up supply licence for under-fire URE Energy

It comes as Ofgem clamps down on poorly run energy suppliers. It had encouraged a boom in the number of companies bringing gas and electricity to people’s homes, pressing down prices.

But increased competition has also meant several suppliers operate on razor-thin margins, making them vulnerable to small fluctuations in the price of wholesale energy.

Share: