Regulator should have granted licences only to financially prudent suppliers – and now the cost falls to everyone
It wasn’t an admission of regulatory failure, more a statement of the bleedin’ obvious, but at least Jonathan Brearley, the chief executive of Ofgem, is finally acknowledging that the rules of the retail energy game require an urgent rewrite. In a speech on Thursday he said the energy regulator would “need to build an energy market that is more resilient to shocks”. You bet.
Ten suppliers have gone bust since the start of August, and nobody expects the tally to end there. Ofgem cannot be expected to run a regime where no company ever collapses, but the costs of the current mopping-up exercise – in other words, forcing bigger companies to accept stranded customers – are ultimately loaded on to everybody’s bills. There should have been a strong obligation on Ofgem to grant licences only to companies with a high degree of financial prudence.
