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Ofgem says failing energy suppliers will add £85 to bills

The collapse of dozens of energy companies will add at least £85 to household bills from next April, according to the first official estimate from regulator Ofgem.

But the total cost could rise further if global gas prices continue to rise.

UK household bills are set to be £85 higher in 2022-23 than this year - and it could be higher

first

UK household bills are set to be £85 higher in 2022-23 than this year – and it could be higher

NS receipt The rise of troubled families does not include the debacle of Bulb, which collapsed and was placed in a special administrative process last month.

Light bulb exit the market backed by a £1.7bn loan from taxpayers after none of the ‘big six’ were willing to take on 1.6m of its customers as a last resort provider together.

Ofgem said in newly released court documents it avoided adding an extra £45 to the average UK household bill if the last route provider was used.

Ofgem’s numbers are more upbeat than a recent analysis by Investec Bank Plc, which estimated the £3.2 billion cost of Bulb’s demise to taxpayers, Bloomberg reported.

That would be an average of £120 per household.

Ofgem has refused to publish the legal documents, but an appeal by Financial Times and Bloomberg to release the papers that were issued by a judge today.

The latest cost-of-living crisis stemmed from a spike in wholesale gas prices, which could see the government energy price limit gain hundreds of pounds next April.

Record gas costs caused the collapse of 28 energy companies by 2021 – including 25 since September.

Plus it’s expected to go bankrupt in the coming weeks, which further contributes to the projected increase in energy bills over the next few months.

Ofgem estimates that given the number of failed suppliers so far this year, the extra cost per consumer in 2022-23 will amount to £80-£85.

But they advise we should take that number lightly because the collapse of more companies and a further increase in wholesale gas prices could add to this number.

Similarly, a drop in wholesale gas prices could benefit UK households and reduce an estimated £80-85.

Ofgem writes: “Current estimates of £80-£85 costs per household should be handled with caution.

“It will continue to rise and fall next year as global gas prices remain volatile.

“We are continuing to work with governments and consumer groups to keep the cost of customer bills under control.”

Small company Zog Energy is the latest bankruptcy, leaving 11,700 homes in the UK without an energy supplier.

Orbital Energy and Energetic Energy both collapsed last week, affecting more than 70,400 customers.

Eleven more are expected to leave the market before the end of the year, with Britons’ annual bills are set to soar up to over £2,000.

Britons whose suppliers have gone bankrupt have been advised read the meter and not to switch, as they will be covered by Ofgem’s price cap and may see higher bills if they change providers.

Martin Lewis explains what you need to do about your energy bills when gas prices soar

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https://www.thesun.co.uk/money/16931802/failed-energy-suppliers-add-85-bills-ofgem/ Ofgem says failing energy suppliers will add £85 to bills

Bobby Allyn

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