UK gas and energy regulator, Ofgem has faced criticism from MPs after it failed to prevent 29 energy suppliers from collapsing since July 2021, leading to questions over whether it is fit for purpose.
According to a Public Accounts Committee report, customers have had to foot the £2.7bn cost of the failures, averaging an extra £94 on energy bills.
Ofgem has been accused of acting too slowly and not protecting consumers and suppliers alike.
“Its failure to effectively regulate the energy supplier sector has come at a considerable cost to billpayers,” the committee said.
“Ofgem must urgently learn lessons to protect customers and prevent them from having to foot the bill in the event of any future failures.”
Bulb Energy, the largest of the collapsed companies, went into administration last year and the PAC warned that bills will likely increase further as the nationalised firm heads towards an uncertain future.
A proposed sale to Octopus has been halted due to concerns over how much of the cost will be borne by taxpayers and by complaints from rivals.
Moving forward, the committee added: “Ofgem is bringing in new rules to improve the financial resilience of the market but needs to manage complex trade-offs between improving the sector’s resilience and encouraging innovation and competition.”
Ofgem and the government must work together to ensure the market is regulated to support the transition to net zero, it added.