Collapse of 11 small energy companies is likely to land customers with a bill of £172million, consumer watchdog says
- Energy customers face a £172million bill following collapse of 11 suppliers
- Unpaid bills from these will be passed to other firms and their customers
- Citizens Advice has called on the government to improve customer protection
Energy customers face a £172million bill following the collapse of 11 electricity and gas suppliers since January last year, it is claimed.
The small companies that went bust left behind unpaid industry bills, which will be passed on to other firms and their customers – around £6.60 per household, Citizens Advice said.
The liabilities include the firms’ obligations to buy a proportion of electricity from renewable sources and money due to businesses responsible for maintaining the energy grid.
Citizens Advice has called on the Government to consider measures for limiting customers’ liabilities in future.
Energy customers face a £172million bill following the collapse of 11 electricity and gas suppliers since January last year (stock image). The unpaid bills from defunct suppliers will be passed on to other firms and their customers
Regulator Ofgem said it has brought in checks to assess the viability of new firms.
Gillian Guy, chief executive of Citizens Advice, said: ‘Consumers shouldn’t have to foot the multimillion-pound bill left behind when companies collapse – and they certainly shouldn’t lose their usual protections in the process.
‘The Energy White Paper is the perfect opportunity for the Government to close the gap in protections and limit the cost to consumers of any future supplier failures.
‘It must act now.’
Ofgem’s director for future retail markets, Philippa Pickford, said that competition in the energy market had helped to ‘drive down’ prices.
She added that the regulator had introduced new tests for companies applying for a licence which are aimed at improving standards and ensuring suppliers meet their obligations.
Energy UK director of policy, Audrey Gallacher, said it was ‘concerning’ that administrators taking charge of failing companies are not required to treat indebted customers in the same way as suppliers.
‘So we fully support Citizens Advice call for existing consumer protection requirements to be extended to administrators.
‘The increase in competition and the number of suppliers in recent years have been great for customers in providing choice and driving down prices.
‘But we welcome Ofgem bringing in tougher checks for suppliers entering and operating in the market to ensure they have sustainable business models and are adequately financed to serve their customers.
‘Ofgem now needs to ensure that the ongoing operation of companies is monitored to minimise the risk of additional costs being loaded on to consumers.’