Amount owed to energy suppliers hits record highs
As reported by BBC News today, the gas and electricity regulator Ofgem said it was considering a one off charge on energy bills to help protect energy suppliers from going bust as debts reached £2.6bn in the summer.
The rises in debt (the amount owed to suppliers from unpaid bills) was due to both the increase in wholesale energy prices and wider cost of living pressures.
The one off rise to bills is thought to be around £17.00 a year but any rise would not take place until April next year, Ofgem said.
“We know that households across the country are struggling with wider cost of living challenges, including energy, so any decision to add costs to the price cap is not one we take lightly,” said Tim Jarvis, director general for markets at Ofgem.
“However, the scale of unrecoverable debt and the potential risk of suppliers leaving the market or going bust, which passes on even greater costs to households, means we must look at all the regulatory options available to us.”
Ofgem pointed out that if a one of charge did not take place, the risk faced by household and businesses could be far greater with higher costs and poorer standards of service if suppliers were allowed to go bust.
Ofgem will speak to the energy industry and consumer groups to understand options going forward:
“We must consider the fairest way to maintain a stable energy market and we will do this in consultation with all our partners to ensure we are protecting the most vulnerable households,”
Ofgem latest energy price cap reduced the price household’s pay for their energy but prices are expected to go back up in January 2024.
It’s really important as a business that you keep a track on what’s happening with prices in these extremely volatile times.
With prices due to stay at much higher levels for a number of years to come, our weekly price trends update is designed to help explain what the key drivers are and provide you with all of the information to make a well informed decision on when to agree your next contract.
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