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Energy Supply: Costs

Question for Department for Business, Energy and Industrial Strategy

UIN 35694, tabled on 19 July 2021

To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment he has made of the extent of the risks to consumers of energy suppliers failing in the context of recent increases in wholesale energy costs.

Answered on

27 July 2021

When an energy supplier becomes insolvent, for whatever reason, Ofgem revokes the supplier’s licence, and appoints another supplier to quickly take over serving the customers, via the Supplier of Last Resort (SoLR) process. Customer credit balances are protected under this process, nearly always without recourse to the Last Resort Supply levy, which allows for the mutualisation of certain costs of onboarding the new customers.

In the unlikely event where the use of SoLR powers would not be practicable, the Government has put in place a Special Administration Regime, whereby my Rt. Hon. Friend the Secretary of State may seek the appointment of an administrator, whose primary objective is to ensure continuity of energy supply at the lowest practical cost.