The Public Accounts Committee (PAC) said the energy regulator did not tighten requirements for new suppliers until 2019 or for existing suppliers until 2021, despite problems with the financial resilience of energy retailers that emerged in 2018 and wholesale natural gas prices gas and electricity skyrocketed to unprecedented levels. The commission’s report said about 29 energy suppliers have failed since July last year, subsequently affecting about four million households. Customers are left to pay the £2.7bn cost of the failures with an extra £94, the watchdog said, with the price “very likely to rise”. The PAC report concluded that this was due to Ofgem’s “failure to effectively regulate the energy supplier market”. He added that the regulator “failed to strike the right balance between promoting competition in the energy supplier market and ensuring that energy suppliers were financially resilient”. The watchdog also found that the price cap “provides only very limited protection to households against increases in the wholesale price of energy”, noting Ofgem’s expected prices could “worse significantly by 2023”. The Department for Business, Energy and Industrial Strategy and Ofgem should “consider the costs and benefits of the price cap from a consumer perspective” before making decisions on the future of energy price controls. The PAC said the position of vulnerable customers, especially as they already pay higher energy prices, was “unacceptable”. Read more: Kate Winslet donates £17,000 to pay 12-year-old girl’s life support rising energy bill ‘The bottom fell out of our world’ – tackling childhood cancer in cost-of-living crisis He said he was not convinced Ofgem had the “skills and capacity needed to take a more active role in regulating the energy supplier market”. PAC chair Dame Meg Hillier said: “It is true that global factors have caused the unprecedented gas and electricity prices that have caused so much damage to energy suppliers over the last year, at such a terrible cost to households. But the fact it remains that we have regulatory authorities to put the framework to support us for the bad times. Use Chrome browser for more accessible video player 0:37 “I hope Sunak lowers our energy prices” “The problems in the energy supply market were evident in 2018 – years before the unprecedented rise in prices that triggered the current crisis and Ofgem took too long to act.” He added: “Households will pay dearly, with the cost of bailouts adding to records and bills rising. “The PAC wants to see a plan, within six months, of how the government and Ofgem will put customers’ interests at the heart of a reformed energy market, driving the transition to net zero.”
