Ofgem Announce Changes to Prevent Further Chaos
New rules to come in soon
Ofgem, the energy regulator, has recently said that it will be tightening up the rules for new energy suppliers.
This has come following nine suppliers going bust in 2018 and early 2019.
The most recent of these suppliers is Economy Energy, which was carrying 235,000 customers when it dissolved.
The new rules will revolve around whether firms can withstand the market, especially during increasing prices of wholesale energy.
Mary Starks, Ofgem’s executive director for consumers and markets, said that new rules put in place by Ofgem will ensure new suppliers go through in depth background checks “with a view to strengthening our requirements to raise standards in a couple of areas, particularly around customer service and financial resilience".
This, of course, would make it much more difficult for suppliers for materialise, and therefore reduce the amount of suppliers failing. The new rules are said to be introduced in April.
These rules come after about 80 energy suppliers are now around compared to the handful around a few years ago.
Suppliers gone bust in the past year already include Economy Energy, Spark Energy, Extra Energy, Future Energy, National Gas and Power, Iresa Energy, Gen4U, One Select and Usio Energy.
This also comes on top of the price cap which limits prices of tariffs, another rule controlling the actions of suppliers.
Comment from Victoria Arrington, spokesperson for energyhelpline:
“We applaud Ofgem’s plans – we think it’s a great move that will hopefully have a positive impact on customer service, and on the evolution of the consumer energy market.
“There are many suppliers of varying quality out there, and if you feel your supplier is letting you down, there is no need to wait for new regulation. You could switch to a highly-rated supplier today. Good service and price are not mutually exclusive, and there are plenty of 4 and 5 star suppliers offering good deals currently - so if you feel unhappy, switch! It only takes a few minutes, and is the easiest big bill to save on."