LONDON (Reuters) – Britain’s energy market needs quick reforms, regulator Ofgem said on Thursday, flagging it plans to announce changes to the market in the coming weeks.
The regulator’s role has come under scrutiny after more than 20 British suppliers went bust over the past few months, caught out by record high wholesale gas and power prices they were unable to pass on to customers due to the regulator’s price cap.
“We accept that the energy market needs reform and quickly – the current system was not designed for this sort of extreme market event,” a Ofgem spokesperson said in a statement.
It said its priority was to protect customers and it will announce changes in the next few weeks “that will demonstrate the seriousness with which we are tackling the pace of change needed, the concerns around the financial resilience of the market, as well as ensuring that fair prices are reflected through the price cap.”
Ofgem said its safety nets have protected more than 4 million customers, moving them to new suppliers and protecting their credit balances.
However, many of these customers have ended up facing higher bills as any cheaper, fixed-term deals they had with companies that went bust do not need to be honoured by their new supplier.
(Reporting By Susanna Twidale; editing by David Evans)
