Decision on bad debt recovery decision pushed back

The regulator has said the move will allow it to consider the impact of the government’s energy bill support package

Big Zero Report 2022

Ofgem has announced it will delay its consultation on introducing an allowance in the price cap to recover bad debt.

The consultation would aim to ensure the cap reflects the efficient costs incurred by suppliers due to bad debt and other debt-related costs as a result of the sharp increase in gas prices in recent months.

The regulator deemed the delay of the consultation “prudent” – the move is believed to allow more time to understand the implications of the government energy bill support package and high gas prices on bad debt costs.

In a letter to suppliers and consumer groups, Ofgem explained that it still intended to issue a consultation on debt-related costs but on a longer timeline than previously suggested and “only if we find evidence that suggests there are a material and systematic increase in these costs”.

Last week, Ofgem published its new methodology for a quarterly review of the price cap.

If you enjoyed this story you can sign up to our weekly email for Energy Live News – and if you’re interested in hearing more about the journey to net zero by 2050, you can also sign up to the future Net Zero newsletter. 

Latest Podcast