Ofgem toughens rules for new UK energy companies


New energy companies wanting to enter the UK market will be forced to show how they can fund their operations for their first year under new rules announced by Ofgem in response to a string of small household suppliers collapsing.

The energy watchdog said on Thursday that the directors, major shareholders and senior managers of any new company wanting to sell electricity and gas to households will also have to prove they are “fit and proper” to hold a licence.

The stricter rules, which will come in to force in June, have been drawn up following a flurry of failures of smaller suppliers over the winter, which had given rise to claims that entry requirements were too lax.

The new requirements will also require new entrants to detail how they expect to comply with key regulatory and market obligations and their intentions to provide a “proper” level of customer service.

Mary Starks, executive director of consumers and markets at Ofgem, said: “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.

“We will adopt a proportionate, risk-based approach to licensing suppliers and will continue to encourage competition and innovation, including innovative business models, which benefits consumers.”



READ SOURCE

READ  Cuadrilla in race to frack second well to beat deadline

1 COMMENT

  1. Competition works for me. I was finally able to leave the burning dumpster which is EDF energy. I’d recommend moving onto smaller players like bulb and octopus just to send a message…. not to mention experiencing customer service again…. EDIT: Well I’d may as well plug my referral link for £50 credit on switching over. I’m with bulb but octopus energy is pretty great too. bulb.co.uk/refer/andrew6140

LEAVE A REPLY

Please enter your comment!
Please enter your name here