Under OFGEM rules credit balances are supposed to be protected along with continuity of supply. A supplier of last resort is tasked with ensuring this and it then bills OFGEM for any costs incurred and OFGEM spreads the costs among the remaining suppliers. The suppliers ultimately pass the costs on to every bill payer by way of higher charges so it is in the interests of every bill payer to have a stable and properly regulated energy market. But a growing number of industry influencers and media sources are beginning to sound alarm bells, no doubt because of the sheer number of failures in such a relatively short period of time.
Many who have yet to be affected by a failure may not be aware of how the figures have been stacking up and for some time now they have looked dire and ridiculously at odds with a market which is supposed to be regulated:
1. Future Energy - January 2018
2. Iresa - July 2018 (100,000 domestic customers)
3. National Gas and Power - July 2018 (80 non-domestic customers)
4. Electraphase Energy - August 2018 (entered administration)
5. Gen4U - September 2018 (500 domestic customers)
6. Usio Energy - October 2018 (7,000 domestic customers)
7. Extra Energy - November 2018 (108,000 domestic and 21,000 business customers)
8. Spark Energy Supply Limited - November 2018 (290,000 domestic customers)
9. OneSelect - December 2018 (36,000 domestic customers)
10. Economy Energy - January 2019 (235,000 domestic customers)
11. Our Power - January 2019 (38,000 domestic customers)
12. Brilliant Energy - March 2019 (17,000 households)
That is why some think that the system is broken. Even a former chief energy regulator has said questions should be asked about Ofgem’s administration. And I think that another industry source has raised a very pertinent point in reportedly saying that supplier of last resort was contingent on there being few defaults. That was Ofgem’s view. That’s not been the case.
