Watchdog puts bite on failing energy firms

Ofgem moved to clamp down on energy suppliers going bust, introducing tough new rules that will force them to prove their financial strength.

The move follows the recent collapse of about a dozen suppliers, including OurPower, Spark Energy Supply, Future Energy, National Gas and Power, Iresa Energy, Gen4U and Usio Energy.

Ofgem says: “Companies applying for a licence to supply energy will have to undergo more stringent tests from June in order to help drive up standards for customers and reduce the risk of supplier failure.”

The stricter rules will force directors, shareholders and top managers to prove they are “fit and proper” to hold a licence. This will include proof they can properly fund their operations. The new rules will be rolled out from June this year.

The watchdog said: “In the last 18 months, a number of suppliers have failed, many of whom provided a poor level of customer service.”