Ofgem plans reforms to protect consumers

Energy regulator Ofgem has proposed reforms designed to protect customers and ensure energy suppliers are resilient to market shocks.

It comes days after it told 17 British energy suppliers they have to improve how they deal with vulnerable customers, with the watchdog identifying "severe weaknesses" at five firms.

A raft of energy suppliers have collapsed since the start of last year after being unable to cope with soaring energy prices. The governmentisfacingaroughly£6.5 billionbillforthecollapseof supplier Bulb alone.

The regulator said yesterday the fresh proposals include introducing capital requirements to ensure suppliershaveenoughcash to deal with future energy shocks.

It said it will also require supplierstoring-fencemoney they need to buy renewableenergyandmoreclosely monitor the use of customers'creditbalancestostamp out misuse by firms.

Ofgem said it is seeking feedback on the plans and hopes to publish the reforms in the spring.

Chief executive Jonathan Brearley said: "The energy crisis has had a profound impactonthesector,itsbusiness models, our approach toitsregulationandtheway we think about risk.

"Theseproposalswillprovide protections, checks and balances for consumers, suppliers and the entire sector to create a more stable market.”