Energy Suppliers blame Ofgem for the crisis in the energy market
A group of energy suppliers including several of those forced to exit the market in recent weeks have joined forces to put the boot into Ofgem blaming the regulator for the crisis that has engulfed the energy supply market.
No suppliers will be left to regulate
In a letter written by the former CEO of failed supplier PfP Energy and supported by a number of suppliers currently in administration and some still active accused the energy regulator of bringing the energy market to its knees.
The letter says that the suppliers have no confidence in the regulator. The letter states: “Ofgem has contributed to the energy market being brought to its knees, to the unfortunate detriment of all parties involved. Thirteen energy suppliers and counting have closed in the last two months alone impacting over two million consumers so far.”
The energy price cap comes in for the most criticism and is blamed for being one of the biggest contributors to energy suppliers being forced to exit the market. The companies say that regulating suppliers with the cap has ensured that they are having to buy energy for more than they can sell it.
Also read: Ofgem warns of more energy supplier failures and admits to needing a new approach
A formal complaint
The energy suppliers backing the letter include failed suppliers Pfp Energy, Green, Utility Point and companies still trading such as UK Energy Incubator Hub and Neon Reef and acts as a formal complaint against the regulator.
The letter goes on to say; “Please Ofgem listen to energy suppliers now, otherwise you will have no suppliers left to regulate and consumers will have no choice in who supplies their energy or confidence in the energy market or Ofgem as a regulator.
“We implore you Ofgem to act immediately.”
Their pleas are unlikely to be answered as it appears Ofgem has doubled down on its decision to not support struggling energy suppliers. The UK government too has failed to offer any more support to the industry.
Consumers too have not been offered any support as in Wednesday’s budget, Chancellor Rishi Sunak ruled out VAT being slashed on household energy bills.
Also read: Ofgem vows to crack down on energy suppliers following increasing scrutiny of its own performance
Ofgem defends the price cap
Ofgem chief executive Jonathan Brearley defended the price cap at the recent Energy UK Annual Conference and said: “The price cap, which was introduced almost three years ago, has also played its part.
“When the costs of supplying energy go up or down, it ensures that suppliers only pass on legitimate costs to their customers.
“While gas prices remain high, the cap will inevitably need to reflect them to allow suppliers to recover their costs, but it is still protecting millions of customers from the full impact and pace of the rising wholesale prices we are seeing today.
“We accept that, as a result of the events of the past months, we will need to regulate the energy market differently.”
With more energy suppliers expected to exit the market in the next few weeks and months his words will be of little comfort.
Also read: A 34% hike in the energy price cap is needed to save struggling energy suppliers
Further Reading
Ofgem issues a warning to energy suppliers over the use of threatening language towards customers
High Wholesale energy prices forecast to continue throughout the winter
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Through our energy market consultancy services, and the software we’ve developed, we’re supporting new UK electricity and gas suppliers get set up and start supplying.
For more information on how to start and manage an energy company, get in touch with Dyball Associates today.
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