Now tighten rules, say Big Six

BRITAIN’S biggest energy firms are pushing for stricter controls on new market suppliers after a string of firms went bust.

They argue that new regulations would help limit the financial fallout when bigger, more financially secure companies and their customers are forced to foot the bill for failing suppliers.

The recent collapse of smaller energy suppliers has left more than a million customers in limbo. Senior industry sources estimate the cost of mopping them up will be at least £1billion, but warned that with as many as five million more still at risk, that could rise sharply.

When firms go bust, larger firms are asked to absorb customers, buying up extra gas supplies and passing some of the extra costs on to their own consumers. The price of providing this safety net could add more than £100 to the average annual bill. Executives at a number of the ‘Big Six’ energy suppliers – British Gas, EDF, E.ON, Npower, ScottishPower and SSE – have asked the Government and Ofgem to subject new energymarket entrants to more stringent regulations that would prevent a future fallout.

‘We’ve got to the point where a couple of guys with a computer and a phone have been able to start up a new company – and the others are asked to step in when it all goes wrong,’ said a source.