Citizens Advice published research on 10 July 2022 finding that 28 energy suppliers have failed since the beginning of August 2021, causing turmoil for more than 4 million customers1. The report, Back from the Brink? How Consumers are still reeling from the energy market meltdown, concludes that the Supplier of Last Resort process worked well for the majority, but that a significant minority of people continue to face severe disruption1.
The report sets out a list of problems affecting customers of failed suppliers. Credit refunds remain outstanding months on, with confusion around when they will be paid, and customers experience aggressive tactics from unregulated debt collection1. Customers often receive inaccurate bills as a result of poor data management before the failure, but face a lottery as to whether administrators can investigate, often leaving them without redress1. Unlike energy suppliers, administrators can backbill customers, meaning they can demand payment for unbilled usage dating back over a year1. The report also states that consumers are expected to foot an ever growing bill for the failure of Bulb, currently £70 per person1.
The report's central recommendation is that supplier failure and Special Administration processes need reform1. Citizens Advice states its support for the Government in providing Ofgem with more powers to step in when energy suppliers fail and to tackle problems with administrators1.
"Since the beginning of August 2021, 28 energy suppliers have failed, causing turmoil for over 4 million customers."
The report notes there were just 12 weeks before the start of winter at the time of publication, and that action needs to be taken to ensure the costs of past regulatory failures do not add to the burden households face1. The research does not set out a timetable for the reforms it seeks, and no Government or Ofgem response to the report has been reported1.
Why it matters for households
The failures described affect the practical mechanics of a household's energy supply and its money. When a supplier stops trading, customers are moved to a new supplier through the Supplier of Last Resort process, which the report says worked well for most1. For a minority, the consequences continue long after the switch: money owed back sits unreturned, billing records are wrong, and administrators can pursue payment for usage dating back more than a year, something an energy supplier cannot do1. The Bulb figure of £70 per person is a cost spread across consumers rather than borne by the failed company1.
For a household, these are questions of control over its own account: whether credit built up with a supplier is returned, whether a bill is accurate, and whether there is a route to challenge it. The report frames the gaps as a matter of redress, noting that whether administrators can investigate is a lottery that often leaves customers without it1. The energy supplier failures record and the supplier licensing and failure rules are the framework in which these outcomes arise, and Citizens Advice is one of the bodies that represents consumers in that framework.
What happens next
The report calls for reform of supplier failure and Special Administration processes and supports giving Ofgem more powers to intervene when suppliers fail and to address problems with administrators1. It notes that 12 weeks remained before winter at the time of publication1. No dated commitments from the Government or Ofgem in response to the report have been reported1.