Reason for suppliers going broke ?

bagand96

Grumpy_chap said:

With YE failing just before Christmas, now GNE plus Simplicity in January, and rumours of others, there is clearly something amiss in the market.  Maybe the bar to entry and being admitted to regulation is too low, not that I want to be anti-competition.

Maybe, as well as the energy suppliers being able to credit check customers, we need to be able to credit check the suppliers?

That's the exact problem that Ofgem face. If they raise the barriers to entry they get accused of being anti-competitive and protecting the existing big suppliers. 

However if entry requirements are too lax and you end up with a lot of new suppliers going bust quickly, people acuse Ofgem of not being fit for purpose and criticising their SoLR process.

It's a fine balance. 

[Deleted User]

Grumpy_chap said:

With YE failing just before Christmas, now GNE plus Simplicity in January, and rumours of others, there is clearly something amiss in the market.  Maybe the bar to entry and being admitted to regulation is too low, not that I want to be anti-competition.

Maybe, as well as the energy suppliers being able to credit check customers, we need to be able to credit check the suppliers?

Ofgem has just consulted on changes to the Supply Licence approval criteria. The 'bottomline' is that for a few £00s it is possible to buy a Supply Licence with AN Other doing all the work. As said above, previously, Ofgem has argued that their approval process was good for competition (ie; prices) and that it was not in their remit to carry out any Due Diligence on those applying for Licences: under pressure, they appear to have had a change of mind. Given that some of the more successful larger new entrants are running with significant annual losses (Octopus - £36M; Bulb - £121M; Ovo - £106M etc), a simple credit check would not work. Arguably, each time an auditor signs off on business accounts they have to comment on the viability of the business going forward. It is also worth remembering that a number of the suppliers who have failed have been Council Tax payer backed.

Gary1963

As a GNE customer I received £80 joining credit as well as £120 for two referrals. I calculated it covered my usage to date. 

savefortherain

You'd have thought this would have made the national news. Energy suppliers going bust left and right is pretty news worthy, but I guess it's more important to know which actresses refuse to do sex scenes in movies directed by men.

I've only just switched to a smaller company, if I knew this was a risk, I probably wouldn't have bothered and paid extra for the no hassle energy supply.