Asked by: Richard Thomson (Scottish National Party - Gordon)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what analysis (a) his Department and (b) Ofgem have made of the extent to which energy suppliers who exited the market over the last twelve months were using customer credit balances to support unsustainable tariffs.
Answered by Greg Hands
On 14 April Ofgem published an open letter outlining proposals to further tighten protections against the financial instability of suppliers, including preventing the use of customer credit balances as working capital. Ofgem plans to conduct a statutory consultation on ringfencing customer credit balances later in the spring of this year. They also plan a consultation on policy options related to capital adequacy.
In the event of a supplier insolvency, customers are transferred to another supplier appointed by Ofgem and domestic customers have their credit balances protected. Customers can ask their supplier to refund a credit balance at any time. Suppliers must do so promptly unless they have reasonable grounds not to.
Asked by: Richard Thomson (Scottish National Party - Gordon)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, on what date Ofgem first consulted on protecting credit balances as part of its supplier licencing review; and what estimate he has made of the value of credit balances subsequently mutualised as a result of supplier failures since that date.
Answered by Greg Hands
Ofgem first consulted on protecting customer credit balances in October 2019 (https://www.ofgem.gov.uk/publications/supplier-licensing-review-ongoing-requirements-and-exit-arrangements).
The Department has not estimated the value of customer credit balances that have been mutualised. Ofgem approves claims for the recovery of the costs under the Supplier of Last Resort levy.
On 14 April 2022 Ofgem published an open letter outlining proposals to further tighten protections against the financial instability of suppliers, including preventing the use of customer credit balances as working capital.
Asked by: Richard Thomson (Scottish National Party - Gordon)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps his Department is taking to require energy suppliers to protect customer credit balances.
Answered by Greg Hands
On 14th April, Ofgem published an open letter outlining proposals to further tighten protections from any financial instability of suppliers, including preventing the use of customer credit balances as working capital. Ofgem plans to conduct a statutory consultation on ringfencing customer credit balances later in the spring of this year. They also plan a consultation on policy options related to capital adequacy.
Asked by: Richard Thomson (Scottish National Party - Gordon)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what recent assessment his Department has made of the potential merits of extending (a) support the Acorn Project in northeast Scotland and (b) other carbon capture usage and storage projects.
Answered by Greg Hands
The Acorn Project is the reserve cluster in Track-1 of the Carbon Capture, Usage and Storage Cluster Sequencing process. The Government has continued to engage with the cluster to help it continue its development and planning, and has allocated the project more than £40m in development funding in recent years.
The Government intends to bring forward a process to facilitate the deployment of additional ‘Track-2’ clusters.