Energy Chaos: 29 Suppliers Collapse, Leaving Millions on the Hook
Since July last year, 29 energy suppliers have gone bust, plunging around four million UK households into uncertainty. The fallout has cost consumers a whopping £2.7 billion—adding an extra £94 to every household’s energy bill. And brace yourselves, because the Public Accounts Committee (PAC) warns these costs will likely climb higher.
Ofgem Under Fire for Letting the Crisis Worsen
The PAC slams regulator Ofgem for dragging its feet. Issues with energy firms’ financial strength were clear back in 2018. Yet, Ofgem only tightened rules for new suppliers in 2019—and waited until 2021 to do the same for existing ones. By then, wholesale gas and electricity prices had skyrocketed.
“Ofgem did not strike the right balance between promoting competition and ensuring suppliers were financially resilient,” the PAC said.
“The price cap offered limited protection as wholesale prices surged and is expected to worsen through 2023.”
Vulnerable Customers ‘Paying the Price’
Vulnerable households, who already face higher energy costs, have been dealt a brutal hand. The PAC brands their situation as “unacceptable.” It questions whether Ofgem even has the skills to take a tougher, proactive stance. Dame Meg Hillier, PAC chairwoman, said:
“Global factors caused the unprecedented price hike, but regulators are meant to shield us from the worst.”
“The supply market showed signs of trouble years before the crunch, but Ofgem was too slow to act.”
Calls for a Radical Overhaul and Long-Term Fix
The PAC demands a plan within six months outlining how government and Ofgem will place customers first while driving the shift to net zero.
Which? director of policy Rocio Concha adds:
“Short-term fixes like the price cap helped, but we need a long-term solution to stop soaring energy bills.”
“An urgent review of energy pricing, including the price cap, is essential to create a fair, affordable system.”
“The government must quickly launch a home insulation programme to cut bills for good.”
With energy bills biting hard, UK households are crying out for serious reform. But will regulators and politicians step up, or watch the crisis deepen?
