Energy Supply

(asked on 14th April 2022) - View Source

Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what analysis (a) his Department and (b) Ofgem have made of the extent to which energy suppliers who exited the market over the last twelve months were using customer credit balances to support unsustainable tariffs.

Answered by
Greg Hands Portrait
Greg Hands
Minister of State (Department for Business and Trade)
This question was answered on 26th April 2022

On 14 April Ofgem published an open letter outlining proposals to further tighten protections against the financial instability of suppliers, including preventing the use of customer credit balances as working capital. Ofgem plans to conduct a statutory consultation on ringfencing customer credit balances later in the spring of this year. They also plan a consultation on policy options related to capital adequacy.

In the event of a supplier insolvency, customers are transferred to another supplier appointed by Ofgem and domestic customers have their credit balances protected.  Customers can ask their supplier to refund a credit balance at any time. Suppliers must do so promptly unless they have reasonable grounds not to.

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