Ovo’s last resort supply payment claim of £45k approved by Ofgem

The claim covers the costs incurred in acting as supplier of last resort to domestic gas customers of former supplier Cardiff Energy Supply Limited

Ovo Gas Limited has been granted approval by Ofgem to claim a last resort supply payment (LRSP) of up to £45,000 from relevant gas network companies.

The claim covers the costs incurred in acting as supplier of last resort (SoLR) to domestic gas customers of former supplier Cardiff Energy Supply Limited.

Southern Electric Gas Limited, now Ovo Gas Limited, was chosen by Ofgem as the SoLR for Cardiff Energy’s gas customers, totalling around 800, after it went bust in August 2019.

Ofgem’s approval will allow Ovo to recover the costs of protecting the credit balances owed to former customers of Cardiff Energy and certain other costs incurred as part of complying with the terms of the LRSD from relevant gas distribution networks.

Lesley Nugent, Deputy Director, Retail at Ofgem said: “Ovo will be paid the amounts specified in the gas consent published alongside this decision, by the relevant licenced gas network companies. This will be recovered by the relevant gas distribution networks allocated in proportion to the total number of nationwide gas supply points. We consider this apportionment to best enable broad socialisation of the claim costs in line with the intent of the SoLR regime to protect all consumers in the market, for example, through limiting the extent of unpaid industry bills of a failing supplier.

“As per the standard conditions of the gas and electricity supply licence regarding LRSP claims, Ovo will be able to submit a claim to each relevant gas distribution network operator, based on the amount we have consented to and each network’s share of the total premises served by the relevant networks. We expect Ovo to do this on the basis of the customer numbers contained within the gas network companies’ regulatory reporting packs.”

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