Ofgem under fire over deal struck with Co-op Energy

ENERGY companies have criticised regulator Ofgem over its actions in the wake of the collapse of GB Energy last month after its 160,000 customers were acquired by Co-op Energy.

Ofgem came under fire after it emerged that Co-op had been in talks to buy the ailing group until just hours before it went bust.

Co-op Energy had been granted access to GB’s books and was fully aware of its financial position. Rival energy firms said this knowledge gave Co-op Energy an advantage when Ofgem asked energy suppliers to submit bids for GB’s customers after the collapse.

A senior energy executive said: ‘It meant that Co-op had a different playing field from the rest of us because they knew what the full risks were when it came to bidding for GB’s customers.’

The addition of GB’s customers takes Co-op Energy to a customer base of nearly 400,000 far sooner than planned.

Ben Reid, chief executive of the Midcounties Co-operative, which owns Co-op Energy, said he could not remember whether he had notified Ofgem of the talks before submitting a bid for GB’s customers.

He said: ‘We looked at it, saw that GB was not solvent. It was clear it was not a going concern so we withdrew. We told them that we were not going to proceed. ‘As we had done all of the due diligence previously, we’d done our homework and we used that information to inform our bid to Ofgem.’

Ofgem declined to say if it knew of the takeover talks. A spokesman for the regulator said: ‘This was not a sale of a business but the allocation of customers to a new supplier. To ensure a fair process all bidders were provided with exactly the same details.’