Ofgem to stop energy suppliers from taking new customers if they don’t meet new standards

New checks planned for suppliers which cannot meet their financial obligations and effectively serve their customer base

Energy suppliers will soon have to meet certain criteria in order to continue operating as normal.

Ofgem has released new requirements for suppliers in an effort to drive up customer service standards.

The consultation includes checks for growing suppliers, which can meet their financial obligations and able to effectively serve their customer base.

If they do not demonstrate this, Ofgem could stop them from taking further customers on.

The energy regulator also plans to introduce new licence requirements in the event of supplier failure to minimise the cost and disruption to the wider market.

For example, when administrators take over failed suppliers, they will have to offer customer protections regarding debt collection to former customers as active suppliers.

Suppliers would also be required to have plans in place to minimise the cost, which is mutualised across other suppliers in the event that they fail.

Mary Starks, Executive Director of Consumers and Markets, said: “Energy suppliers have been at the core of the industry response to the Covid-19 crisis, protecting customers and the energy supply of those most in need.

“Now more than ever we need to ensure that suppliers are set up in the right way to treat customers fairly and meet the challenges of today’s energy system.”

The rules set out in the statutory consultation are expected to come into force this winter.

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