Rivals unpaid debts pushing small energy firms to the brink
07 January 2019
Ofgem wants the industry to pay £14 million of credit balances and other costs for the July collapse of Iresa.
With 9 suppliers ceasing trading last year owing tens of millions of pounds between them to their customers and to industry schemes. Ofgem rules means that much of this debt will fall to rivals. Green Energy’s Doug Stewart has said that its share of the competitors unpaid debt for one scheme alone would wipe out 7% of its annual profits - £21,000. Green Energy will be able to weather this, but has warned that others won’t be able to.
Ofgem wants the industry to pay £14 million of credit balances and other costs for the July collapse of Iresa. Further bills are expected for Spark and Extra which collapsed in November.
In response to Ofgem’s statement that it is reviewing its supply and licensing regime to minimise consumers and competitors exposure to financial risks, Doug Stewart, MD of Green Energy UK, has provided further comments:
"That’s all very well when we know what those costs are going to be, and the risks involved? What are the rules? Since Economy have three open investigations against them, two in the past and are suspended from taking on customers for the SECOND time, the lack of action from Ofgem encourages too many companies to sail too close to the wind.”