Citizens Advice response to Ofgem’s Supplier Licensing Review: Ongoing requirements and exit arrangements
Citizens Advice welcomes Ofgem’s consultation to strengthen the supply licence, and ensure consumers have a better experience should their supplier fail. We broadly agree that the package of reforms will help reduce the likelihood of disorderly market exits, and the associated disruption and additional costs caused for consumers.
In our report, Picking up the Pieces [ 2.4 mb], we recommended:
New ongoing requirements and monitoring to make sure all energy supply companies are operated responsibly and offer appropriate levels of service
Government rules to require administrators of smaller energy companies to also consider consumer interests and to follow Ofgem rules to protect consumers from poor debt collection practices
Reduced costs of mutualisation, including legislative changes to require the bills for the Renewables Obligation to be paid more frequently
Steps to limit excessive customer credit balances, and ensure suppliers have processes in place to protect them
The proposals address each of these recommendations to some extent, although in some areas we think government action is also needed to ensure good outcomes for consumers. In particular, we continue to argue for legislation to ensure the Renewables Obligation to be paid more frequently, to eliminate the current risks that arise from this scheme being paid annually. We also think it is unclear that some of Ofgem’s proposals on credit balance protection will produce the right incentives for suppliers to avoid excessive balances.