ENERGY FLOPS COULD COST US ANOTHER £164
Citizens Advice warning after power firms’ failure racks up £4.6bn bill for new suppliers
THE failures of energy suppliers could potentially add another £164 a year to customers’ bills, amid soaring energy prices and the cost-ofliving crisis.
A report from charity Citizens Advice found that the bill for supplier failures, including the administration costs for collapsed firm Bulb, stands at £4.6billion.
This could result in customers forking out an extra £164, the organisation said. The charity has called on the Government to “urgently review” how different outcomes of the sale of Bulb may affect customers, to prevent bills from spiralling out of control. Since the beginning of last August, 28 energy suppliers have failed, causing turmoil for more than four million customers. Bulb was placed into “special administration” when it collapsed in November last year and was propped up with an initial taxpayer loan of £1.7billion to cover the normal running of the firm until a buyer could be found.
At the time, it had around 1.6million customers on its books, meaning it was too big for the Government to allow it to go through the normal process that suppliers enter when they fail.
The taxpayer bailout was the biggest since Royal Bank of Scotland, Lloyds Banking Group and Halifax Bank of Scotland in the 2008 financial crisis.
The report comes days after the energy price cap – which is set by regulator Ofgem – was tipped to rise to £3364 in January, £360 more than previously predicted.
It found that supplier failures have resulted in customers experiencing aggressive tactics from unregulated debt collection, receiving inaccurate bills as a result of poor data management pre-failure.
Dame Clare Moriarty, chief executive of Citizens Advice, said: “More than half a year since the energy market went into freefall, the bill for supplier failures is still mounting.
“An overhaul is needed before winter piles more pressure on suppliers and customers.
“The Government must improve the supplier failure process and ensure people who’re struggling aren’t chased for debts or left in limbo when they’re waiting for a refund.”