The regulator’s price cap also limits how much firms can charge. But providers have complained that they are unable to pass on rising costs to customers because of the cap on energy bills…reports Asian Lite News.
Around 1.5 million UK customers have been affected by energy firms collapsing under soaring gas prices, media reported.
Avro Energy and Green ceased trading on Wednesday and their 830,000 combined customers face being switched to a new, potentially more expensive, provider, the BBC reported.
All affected customers will still receive energy while a new supplier is appointed by watchdog Ofgem.
Neil Lawrence, director of retail at Ofgem, said its “number one priority is to protect customers.”
The regulator’s price cap also limits how much firms can charge. But providers have complained that they are unable to pass on rising costs to customers because of the cap on energy bills.
Since wholesale gas prices have started to spike, a number of firms have collapsed.
People’s Energy, Utility Point, PfP Energy and MoneyPlus Energy ceased trading in September. These smaller companies, including Avro Energy and Green Supplier Limited, account for more than five per cent of the UK energy market – about 1.5 million customers, according to the report.
Earlier, Business and Energy Secretary Kwasi Kwarteng and Ofgem chief executive Jonathan Brearley We have said that this is not an issue of supply – “the United Kingdom benefits from having a diverse range of gas supply sources with capacity that can more than meet demand.”
“In the event an energy supplier fails, we are committed that consumers face the least amount of disruption possible – and there are clear and well-established processes in place to ensuring this is the case,” a joint statement from government and Ofgal read.
“In the coming days, we will also meet with smaller and challenger energy suppliers and set out the next steps for protecting consumers, businesses and energy suppliers from these global prices rises. Central to any next steps is our clear and agreed position that the Energy Price Cap will remain in place,” it added.