Energy regulator Ofgem has announced reforms in the process that kicks in when an energy supplier goes insolvent, such that it should benefit UK consumers.
Many firms went bust after Russia’s invasion of Ukraine sent energy prices spiralling. In such cases, the failed suppliers’ customers were transferred to a new supplier, which was then compensated through the Supplier of Last Resort (SoLR) levy. Under the new SoLR levy system, the failed supplier will be liable for the cost, meaning it can potentially be recovered as a debt in the insolvency process.
Mr Jarvis said:
“Protecting consumers remains our number one priority and the reforms we have implemented since the energy crisis to stabilise the market mean suppliers are better placed to weather any shocks. However, like in any healthy and competitive market, energy companies will still fail from time to time…”
He added that in such cases, rather than the consumers footing the bill, it was appropriate for the failed supplier to do so instead. Jarvis said the updated rules meant that the cost of supplying a failed company’s customers would have to be met before shareholders can gain anything.
While it’s good that Ofgem is minimising the chances of suppliers going bust in future, consumers are still susceptible to varying energy prices. Xgas can provide heating engineers in Chester to improve your energy efficiency through boiler servicing and thermostatic radiator valves. Get in touch to learn how you can also spread the cost of a new modern boiler through financing plans.