Ofgem is taking a risk with new approach to regulating energy firms | Nils Pratley

The regulator seems to think it will be able to spot trouble in time to avoid more costs being piled on to consumers

In the end, National Grid decided not to activate its new blackout-prevention service, but the very fact it contemplated doing so should serve as a reminder, in case anybody had forgotten during the mild autumn, that the supply crisis hasn’t gone away, that prices are volatile and that all parts of the energy system may be about to be severely tested again.

At the retail end of the energy market, remember, about 29 suppliers went bust between mid-2021 and early 2022, dumping £2.6bn of costs on to consumers even before we count the possible £6.5bn whack from the broken Bulb. So you’d think Ofgem, a regulator that admits its pre-crisis approach to suppliers “led to low financial barriers to entry and light regulation of financial risks”, would opt for an abundance of caution in its overhaul of regulations.

Continue reading...

from The Guardian https://ift.tt/rfvQsR2