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Energy users face £255m bill after supplier failures

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Written by: Paloma Kubiak
06/12/2019
Customers will be footing the bills left behind by a string of firms which have gone bust in recent months, according to a leading charity.

Since 2018, 16 energy suppliers have left the market, affecting over a million customers.

Charity Citizens Advice estimates that consumers now face a £255m bill following the collapse of these firms, through higher energy bills of their own.

It analysed Ofgem data on payments made by suppliers as part of their ‘Renewables Obligation’ which supports large-scale renewable electricity projects.

A number of suppliers failed to make the payments by the deadline and Ofgem was unable to collect payment from some firms which had gone into administration, though it will seek to recover outstanding payments from administrators. As a result, there is a shortfall of around £100m which will ultimately be absorbed by the consumer, the charity warns.

In June, as part of Citizens Advice’s Picking Up the Pieces report, it estimated that consumers would need to pay an additional £172m. But since then, a further five suppliers have failed, meaning consumers now face a £255m bill.

Gillian Guy, chief executive of Citizens Advice, said: “Households are picking up an ever-increasing bill as more suppliers go to the wall. If other suppliers fail in the future that bill is likely to keep rising.

“Ofgem has proposed measures to limit the costs to consumers, but more action is needed. The next government should legislate to compel suppliers to make industry payments – in particular the Renewables Obligation (RO) – more regularly. This would stop suppliers from building up such high levels of debt and stop consumers from being the ones to foot the bill.”

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