A watchdog report found that Ofgem’s failure to effectively manage energy suppliers since 2018 has cost UK households a significant price.
The Public Accounts Committee (PAC) said the energy regulator did not tighten requirements for new suppliers until 2019 or for existing suppliers until 2021, despite problems with energy retailers’ financial resiliency surfaced in 2018 and wholesale electricity and gas prices rose to unprecedented levels.
The commission’s report said about 29 energy providers had failed since last July, which subsequently affected about four million households.
The watchdog said it was customers who had to pay £2.7billion for breakdowns with an extra £94, with prices “most likely going to go up”.
The PAC report concluded this was due to “Ofgem’s failure to effectively regulate the energy supply market”.
It added that the regulator “has failed to strike the right balance between promoting competition in the energy supplier market and ensuring energy suppliers are financially resilient” .
The watchdog also found the price cap “provides only very limited protection to households from a rise in wholesale energy prices”, noting that Ofgem’s projected prices could be “bad”. significantly worse through 2023″.
The Department for Business, Energy and Industrial Strategy and Ofgem should “consider the costs and benefits of price caps from a consumer perspective” before making decisions about the future of energy price controls.
The PAC said the location where vulnerable customers are placed, especially because they already pay higher energy prices, is “unacceptable”.
It said it was not convinced that Ofgem had “the skills and competencies needed to take a more proactive role in regulating the energy supply market”.
PAC President Dame Meg Hillier said: “It is true that global factors driving unprecedented gas and electricity prices have caused so many failures for energy suppliers over the past year, at a cost Such a terrible thing for households, but the fact remains that we have regulators to set the framework to support us during bad times.
“The problems in the energy supply market were clear in 2018 – years before the unprecedented price spike caused the current crisis and Ofgem was too slow to act.”
She added: “Households will pay a heavy price, with relief costs added to the record and bills rising.
“PAC wants to see a plan, within six months, of how the government and Ofgem will put customer interests at the heart of a reformed energy market, accelerating the transition to net zero.” .”