The ampoule administration will cost each household £ 85 – .

The ampoule administration will cost each household £ 85 – .

UK households will pay an additional £ 80 to £ 85 on their energy bills next year after a surge in gas and electricity prices that led to the collapse of 25 suppliers, warned industry regulator Ofgem .
The watchdog said the estimate should be treated “with caution” and could rise or fall depending on wholesale gas prices.

Documents filed in court proceedings over the Bulb collapse also revealed that the UK’s seventh largest energy supplier has been placed in special administration despite cheaper options available.

He estimated the cost of finding another firm to take over Bulb’s customers would have been £ 1.28bn, compared to £ 1.7bn for the special administration. The government insists the £ 1.7bn has been set aside to cover estimated costs and funds will only be taken out when needed.

Ofgem said it did not go for the cheaper process, known as Supplier of Last Resort (SOLR), because it was concerned that another company might not be able to cope with the rapid change in 1.6 million Bulb households.

Failure to transfer customers to a new supplier could have resulted in Bulb’s bankruptcy, the regulator said. Instead, Bulb is run by directors from consulting firm Teneo who will work with the regulator and the government to find an orderly resolution.

Bulb has become by far the largest company to fall victim to an energy supply crisis triggered by soaring gas and electricity prices. She went through a special administrative procedure last month after admitting she could no longer afford to supply her customers.

Households with standard variable tariffs and prepaid meters have already seen their energy bills increase by 12% in October, with a further increase of several hundred pounds a year expected in April during the next review of the price cap of energy.

So far, around 2.5 million customers have switched to new suppliers after the failure of their previous one.

The current crisis affecting UK energy providers has raised questions about market surveillance by energy regulator Ofgem.

As part of the government’s plans to increase competition in a market that had been dominated by the “Big Six” of energy companies, the regulator relaxed its rules to allow the creation of new suppliers.

Critics of this approach have said Ofgem should have taken a stricter view of the amount of capital companies must set aside as a buffer against the risk of rising prices.

Small businesses that have collapsed in recent weeks have argued that they are well run but likely could not have continued to provide customers with energy below the cost of d ‘buy in wholesale markets.

Analysts expect gas prices to remain significantly above levels seen earlier this year. A series of factors pushed prices up, including strong demand in Europe and Asia last winter and slower than expected gas flow from Russia.

An Ofgem spokesperson said the regulator had kept “disruption and costs to customers” to a minimum.

They added, “We know people struggle with costs and any addition to bills is unwelcome. The current estimate of £ 80-85 of costs per household should be viewed with caution. It will continue to rise and fall next year as global gas prices remain volatile. “


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