Cayman Islands, Caribbeanand International News
Friday, Jul 12, 2024

Energy crisis: Around £200m in credit balances 'missing' after supplier failures, Ofgem tells MPs

Energy crisis: Around £200m in credit balances 'missing' after supplier failures, Ofgem tells MPs

Ofgem's chief executive Jonathan Brearley tells the business, energy and industrial strategy (BEIS) committee that the bill for lost credit balances could quadruple from its current level as he faces questions over why the money was not ringfenced.

The energy regulator has told MPs that it estimated around £200m in household credit balances was lost through the failures of energy companies over the past year - with up to £10 set to be added to rocketing bills as a result.

Ofgem chief executive Jonathan Brearley made his remarks as the business, energy and industrial strategy (BEIS) committee seeks lessons in the wake of the energy price-driven spike in inflation that is set to pile misery on consumers.

The watchdog's stewardship of the energy market has been called into question after surging wholesale costs forced almost 30 firms out of business since last summer.

The millions of customers affected were appointed a new supplier by Ofgem but it emerged that household credit balances did not transfer with them as the cash - a consequence of a direct debit level versus energy use imbalance - had often already been accounted for by the companies that went bust.

It was confirmed last week that the energy price cap - which Ofgem said had protected 22 million households from the worst over the winter - is set to rise in April by an average £693 per year per household.

Of that sum, £2.45 accounts for £54m in lost consumer credit balances to date, covering about a quarter of the overall estimated loss.

Mr Brearley said: "Those figures aren't figures that we're finished with but are roughly in that order of magnitude."

He explained Ofgem was in the process of implementing a demand that suppliers return credit balances to customers on an annual basis but the measure was not finalised ahead of the price crisis.

He added: "The argument at the time was that this would make it very hard for small suppliers to operate."

Mr Brearley told the MPs that boosting competition in energy provision had been the "number one priority" for regulators, not just Ofgem, over the past decade.

But he admitted it had come at the expense of tougher financial controls on smaller operators - and it was an issue the regulator was working to address in its proposed market reforms.

Ofgem also announced last week that in addition to the cap reflecting the higher energy costs, there would be a £68 charge to cover the cost of protecting the customers whose energy suppliers had failed because their new suppliers had needed to buy energy at the top of the market to meet their needs.

Mr Brearley sounded a note of caution on the path for energy prices ahead, given the effects already being seen in the market because of the Russia-Ukraine crisis.

"If Russia invades Ukraine that would drive high gas prices and ultimately feed through to customers," he warned.

He explained that while Britain only receives around 5% of its gas supply from Russia, lower overall Russian supply to Europe would mean less supply becoming available from other sources and potentially higher prices as a result.


Related Articles

Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Israel: Unprecedented Civil Disobedience Looms as IDF Reservists Protest Judiciary Reform
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Italian Court's Controversial Ruling on Sexual Harassment Ignites Uproar
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
BBC Personalities Rebuke Accusations Amidst Scandal Involving Teen Exploitation
A Swift Disappointment: Why Is Taylor Swift Bypassing Canada on Her Global Tour?
Historic Moment: Edgars Rinkevics, EU's First Openly Gay Head of State, Takes Office as Latvia's President
Bye bye democracy, human rights, freedom: French Cops Can Now Secretly Activate Phone Cameras, Microphones And GPS To Spy On Citizens
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
Unilever Plummets in a $2.5 Billion Free Fall, to begin with: A Reckoning for Misuse of Corporate Power Against National Interest
Beyond the Blame Game: The Need for Nuanced Perspectives on America's Complex Reality
Twitter Targets Meta: A Tangle of Trade Secrets and Copycat Culture
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
The New French Revolution
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner