Recommendation 21

To follow on from Ofgem’s new monitoring of financial resilience of energy suppliers, we asked if it was looking to provide other new regulations, such as ringfencing customer credit balances. Ofgem told us that it had decided not to require energy companies to ringfence customer credit balances, but that it had introduced ringfencing for the renewable levies and obligations as that was money that energy suppliers collected and passed back to government as part the relevant schemes. Ofgem told us that it was considering how to implement a new regulatory requirement to protect assets that related to hedging contracts when suppliers fail, as these assets were currently the subject of creditor claims from providers of finance, rather than being retained for customers’ benefit. Ofgem explained that protecting these residual hedges would help offset the cost of SoLR when customers are transferred to another energy supplier.45 Failure of the energy market and government interventions