The recent increase in wholesale global gas prices is impacting the UK, as we slowly recover from the impacts of COVID-19. These are unparalleled times in the UK energy market and it is anticipated that we will see more energy suppliers exiting the market in the coming months. At this point, Ofgem appoints a Supplier of Last Resort.
What is Supplier of Last Resort (SoLR)?
In the unfortunate event of an energy supplier going out of business, Ofgem, the independent energy regulator, automatically appoints a new supplier, known as a ‘Supplier of Last Resort’ (SoLR).
Supplier of Last Resort requirements?
Any new energy supplier is assessed by Ofgem and appointed as quickly as possible, to ensure there is no interruption to the supply of energy.
Suppliers must meet several requirements, but, fundamentally, they must show they can take on the new customers without any significant impact on their existing customers.
The SoLR must also show it has the means and ability to secure enough gas and electricity to supply these new customers without significant cost to those customers.
Ofgem will also conduct a review of the profile of the existing customers of the failed energy supplier, this takes into consideration:
- The energy supplier’s ability to handle issuing bills without delay
- Its call centre capability
- Whether it will voluntarily reimburse any customers’ credit balances
If no supplier volunteers to accept the customers of a failed supplier, Ofgem will appoint the supplier they deem best suited to the job.
Ofgem states that their top priority in choosing the SoLR is “to ensure that all customers continue to receive supplies of gas and/or electricity.”
Collapsed suppliers and the take-over Supplier of Last Resort
Green Supplier Ltd.
A detailed Supplier of Last Resort guide can be accessed courtesy of Citizens Advice
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