Britain’s Ofgem to introduce short-term measures to stabilize energy market

A gas cooker is seen in Boroughbridge, northern England, November 13, 2012. REUTERS/Nigel Roddis

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LONDON, Feb 16 (Reuters) – Britain’s energy market regulator Ofgem will introduce two short-term measures to help stabilize Britain’s energy market, it said on Wednesday, after the Soaring prices forced dozens of vendors out of the market.

Ofgem said the measures should help protect consumers who face a further rise in energy prices from April after the regulator raised its cap on the lowest energy tariffs by 54%. widely used after record world gas prices last year.

Over the past year, around 30 UK energy suppliers have exited the market, 26 of which have gone bankrupt since August 2021.

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Later on Wednesday, Sky News reported that Ofgem faces a court hearing on Thursday that seeks to limit the regulator’s ability to seek hundreds of millions of pounds from the remains of collapsed providers.

An Ofgem media official said the case was brought by the administrators of a number of defaulting providers, adding that he had not commented on the ongoing legal proceedings.

As part of the regulator’s short-term measures, energy suppliers will have to offer existing customers the same energy tariffs as new customers.

Ofgem said it would monitor the effectiveness of this measure before determining whether it would become a long-term solution.

Energy suppliers will also have to pay a fee to a former supplier when acquiring a new customer, which will only be triggered if wholesale energy prices fall significantly below the price cap.

“Along with stricter financial regulation, this will ensure that energy companies do not take disproportionate financial risks and that suppliers who have done the right thing by buying energy in advance for their customers are not penalised,” an Ofgem spokesperson said.

The measures will also protect consumers’ ability to switch rates to benefit from cheaper rates when prices drop, the spokesperson added.

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Reporting by Nina Chestney and Marwa Rashad Editing by David Goodman and Mark Potter

Our standards: The Thomson Reuters Trust Principles.

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