Citizens Advice response to Ofgem’s update to its action plan on retail financial resilience
We are broadly supportive of Ofgem’s proposed measures to improve supplier risk management including measures on supplier control over material assets.
We welcome Ofgem’s assessment of ownership of assets and the identification of intra-company arrangements as a risk that could increase mutualised costs in future supplier failures.
It is fundamentally unfair for consumers to pay the cost if suppliers use company arrangements and other actions to limit the amount recoverable by administrators and increase the potential mutualisation cost, while investors and other creditors are protected from the cost of failure.
However, it is essential that any new measures introduced to target such behaviour are effectively enforced and monitored by Ofgem.