Source · Select Committees · Business and Trade Committee
Recommendation 27
27
Accepted
Paragraph: 118
Ofgem must publish a more robust impact analysis of its proposals for energy suppliers to...
Recommendation
Ofgem must publish a more robust impact analysis of its proposals for energy suppliers to ringfence customer credit balances. We expect the impact analysis to be based on evidence received from suppliers following an information request so that it is underpinned by facts, rather than assumptions. The analysis should include comparisons of Ofgem’s preferred option with alterative options. It should be transparent and explicit about the implications of the proposal on energy bills and competition in the market, as well as the cumulative impact of this proposal and the other measures Ofgem is taking to boost resilience in the market. This analysis should be shared with this Committee with enough time for scrutiny before a final decision is taken by Ofgem and include an explanation of how Ofgem has balanced our priorities as set out above.
Government response summary AI-generated
Ofgem already publishes data on customer debt on a quarterly basis, arising from analysis of data gathered under Social Obligations Reporting.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
118
Government Response
Accepted
HM Government · verbatim extract
Accepted
Ofgem has been analysing responses to its policy consultation on Strengthening Financial customer credit balances and stress-testing (building on the requests in 2021 and March 2022, respectively). 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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