Crackdown on small energy suppliers

NEW energy suppliers entering the market will have to pass tougher checks before they are granted a licence.

The crackdown by energy watchdog Ofgem follows an epidemic of start-up energy firms going out of business.

Ofgem said new ‘stringent rules’ – introduced in June – will drive up standards for energy customers and reduce the risk of suppliers failing.

Firms will have to demonstrate they have enough money to fund the supply of gas and electricity, provide good customer service and show they are able to meet the regulations, before they will be allowed to set up in business.

Since January 2018, 11 suppliers have stopped trading. Brilliant Energy, with 17,000 customers, was the latest small supplier to go bust in March. It is the third supplier to cease trading this year.

Ofgem also wants to stamp out shoddy practices among existing suppliers. These include inaccurate billing, holding on to customers’ credit balances and making it difficult for customers to get in touch.

Mary Starks, executive director of consumers and markets at Ofgem, said the requirements would ‘weed out those that are underprepared, under-resourced and unfit’.

A quarter of all energy customers are now with small and medium-sized suppliers driving down the market share of the ‘big six’. In 2017, their annual profits fell for the first time since 2014, by 10pc to £900m. ÷Have you had a problem with your small supplier? Email