Ofgem could force energy suppliers to pay rivals if they lure customers with cheaper deals
Regulator for Great Britain weighs up reintroducing market stabilisation charge to prevent firms going bust Energy suppliers could be forced to pay a charge to rivals if they lure customers with cheaper deals, as the industry regulator for Great Britain attempts to prevent suppliers going bust this winter. Ofgem has published a consultation on a proposal to reintroduce the market stabilisation…
The UK energy regulator Ofgem is considering reintroducing a market stabilisation charge to prevent energy suppliers from going bankrupt during difficult winters. The charge would be triggered if wholesale energy prices fall more than 10%, and suppliers who lure customers with cheaper deals would have to pay 85% of the drop in wholesale rates to rival companies.
This proposal comes as Ofgem worries about the impact of volatile energy prices, which have caused over 30 energy firms to collapse since the start of 2022. In 2022, MoneySavingExpert founder Martin Lewis criticised the MSC, arguing it would deter competition. Ofgem insists reactivating the charge will not automatically raise consumer bills, but the consultation is seeking input on the mechanism's operation, including trigger levels and notice periods.
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