UK energy regulator drops plan to ring fence customers' cash

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UK energy regulator drops plan to ring fence customers' cash

Postby rebbonk » Fri Nov 25, 2022 9:39 pm

UK energy regulator drops plan to ring fence customers' cash

British energy regulator Ofgem on Friday dropped a planned requirement for suppliers to ring fence customer credit balances, allowing them to continue investing the capital as it seeks to find ways to protect the industry from market shocks.

The watchdog is still proposing a requirement for suppliers to hold capital reserves and will seek feedback on the plans it hopes to publish in spring 2023, it said.

But it said on Friday it was not proceeding with its plan to make suppliers ring fence customers' credit balances, and would instead monitor the use of such funds.

The money suppliers needed to buy renewable energy would be ring fenced under the proposals, Ofgem said.

Ofgem's chief executive, Jonathan Brearley, said the energy crisis, caused by soaring wholesale gas prices this year, had profoundly impacted the sector and its business models.

"These proposals will provide protections, checks and balances for consumers, suppliers and the entire sector to create a more stable market," he said.

Ofgem wanted well capitalised businesses that can weather price fluctuations, he said, but it did not want to block new suppliers or "force suppliers to sit on lots of capital they could be investing in innovative ideas".

Centrica, the owner of Britain's largest energy supplier British Gas, said dropping the proposal for customers' credit balances felt like an "abdication of responsibility by a regulator not focusing on the right things".

"When customers pay up front for their energy, they are trusting their supplier to look after their hard-earned money," chief executive Chris O'Shea said.

"They would be appalled to learn their money was being used to fund day to day business activities, but that’s exactly what's happening in some companies, and it undermines confidence in the market."

He added that "if and when a large supplier fails, the recklessness of the decision not to address this issue will be clear for all to see".


Source: https://www.reuters.com/world/uk/uks-ofgem-makes-new-proposals-protect-customers-energy-firms-2022-11-25/

We have already seen that many energy companies had flawed business models, because we are paying for it via enhanced 'standing' charges due to them ceasing trading. This move by the regulator is fundamentally wrong and clearly demonstrates exactly which side of the fence he sits. Don't risk losing YOUR money if a supplier ceases to trade because they have a p*ss poor business model, get your money off these robbing b*st*rds. :fuming: :fuming: :fuming:
Of course it'll fit; you just need a bigger hammer.
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