Source · Select Committees · Business and Trade Committee
Recommendation 26
26
Accepted
Paragraph: 117
Our first priority is to ensure that customer credit balances are protected, so that in...
Conclusion
Our first priority is to ensure that customer credit balances are protected, so that in the event of a supplier failure, customers are always able to recover the credit 78 Energy pricing and the future of the energy market they have built up. Our second priority is to ensure that any policies put in place to secure this also prevent an increase in energy bills. We agree that some energy suppliers have taken high risk decisions on the basis that they were spending their customers money and not their own. Any new regulation on the holding of customer credit balances must carefully balance these two priorities whilst not distorting competition between retailers.
Government response summary AI-generated
Ofgem has announced four Market Compliance Reviews to drive improvement across the market.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
117
Government Response
Accepted
HM Government · verbatim extract
Accepted
Ofgem has been analysing responses to its policy consultation on Strengthening Financial Resilience as well as information submitted by suppliers as part of its latest request on customer credit balances and stress-testing (building on the requests in 2021 and March 2022, respectively). Ofgem has also continued discussions with suppliers and others to better understand the likely consumer benefits and costs of the different proposed options as well as alternatives that have been put forward, such as ‘ATOL-style insurance’ submitted to the Committee. The results are being used to revise the previous Impact Assessment. Ofgem continues to believe that it is in consumers’ interests for suppliers to not be overly reliant on customer credit balances, recognising that related issues were identified by Oxera and NAO as one of the common drivers of the supplier failures in late 2021–22. Ofgem will share its revised analysis with the Committee and would welcome the opportunity to speak to discuss it in greater detail.
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