Ofgem: More bad news for consumers...yeah but no but yeah but no but..

  • 15 December 2021
  • 3 replies
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Userlevel 7
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  • Rocket Scientist
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Energy suppliers to face tougher checks as Ofgem makes raft of changes to prevent more failures amid current crisis

 

Consumer:  Good news then you’re going to police the financial viability of energy companies before giving them a license?

Ofgem: Yes strict new rules to make sure they have the financial resilience to weather volatility

Consumer: So you aren’t going to address the volatility you’ll just expect  the suppliers to pass on the increased costs to the consumers and hope that consumers will be able to pay it?

Ofgem: Yes that’s about it

Consumer: Isn’t it a bit late to be thinking about that now that nearly after 30 energy companies have failed. Doesn’t that show your previous regulation has catastrophically failed? After all surely you will have considered that volatility was very likely and you had a plan to deal with the situation.

Ofgem: Oh no it’s never too late, we did have a plan, there was a price cap

Consumer: So you expected every company to sell energy at less than they paid for it, or did you insist on a robust hedging strategy to smooth this out.

Ofgem: We never gave that much thought until it was too late.

Consumer: So come April not only are we going to have to pay for the monumental price increase but added to that we’ll also have to pay all the bail out costs for the suppliers which folded AND the ongoing monopolistic increases  because there will be no competition from smaller companies, they will never have the financial resilience that the big companies have.

Ofgem: Good point, we’d better stop pushing the mantra that the way to keep energy costs down was to change suppliers. I blame Martin Lewis for that...

Consumer: My estimate is that a medium user’s annual cost is likely to rise by at least £500 a year and more since we’ll have to pay for the financial resilience checks and a much greater number of defaulting customers, plus the energy cost increase

Ofgem: Sorry that’s the price of failed regulation and lack of cohesive government energy policy, but look on the bright side, at least it will encourage people to use less energy.


3 replies

Badge +5

You missed off we have their wages to pay.

Userlevel 7
Badge +11

It isn’t comprehensive, it’s a discussion opener

I could have also added that Ofgem won’t ever blame the Government because, in essence they are one and the same entity. 

Userlevel 7
Badge +8

I see Ofgem are considering adjusting the price cap every 3 months instead of 6. Presumably so that any increases over a shorter period will be smaller ( and less politically damaging ) than waiting for 6 months.

This time round  they will be under pressure to add an element of recouping the losses made by forcing them to sell at less than wholesale costs

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