Ofgem says firms applying for licence must show they have adequate funding for first year. Small energy suppliers will have to undergo more stringent tests before they can set up shop in the UK under plans drawn up by the regulator after a spate of recent failures. Ofgem said this will help drive up standards for customers and reduce the risk of supplier failure. Directors and major shareholders of companies applying for a licence, as well as senior managers, will also have to show they are “fit and proper” to hold a licence.
The list of failed suppliers has grown rapidly over the past six months . Brilliant Energy, Our Power, Economy Energy, Spark Energy, Extra Energy, Future Energy, National Gas and Power, Iresa Energy, Gen4U, One Select and Usio Energy have all gone bust. Ofgem will launch a consultation on requirements for existing suppliers in the summer. This will include considering new reporting requirements for suppliers who are already active in the market and rules around how customer credit balances are managed.
“Applying new requirements on suppliers entering and operating in the market will aid us to weed out those that are underprepared, under-resourced and unfit. This will help minimise the risk of supplier failure and help drive up standards for consumers. Consumer groups welcomed the move. “People shouldn’t be left waiting many months for credit refunds when their supplier goes bust.
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