Energy Suppliers Now Facing Tougher Entry Tests
From June this year, new tests will be rolled out for energy suppliers, meaning it will be much harder for new suppliers to hit the market. These tests will be far more stringent, which is a huge positive for the industry, as this will continue to help drive up standards for customers whilst also reducing the overall risk of supplier failure.
“Energy suppliers are now facing tougher entry tests in order to hopefully eradicate the substandard ones from the market.”
So how will this work?
- Applicants will now have to demonstrate sufficient funding, proving they can cover all funding of their operations for the first year.
- Applicants will also now have to provide a customer service plan. This will need to show how the business will comply with key regulatory and market obligations. They will also need to show how this service plan will provide a proper level of customer service.
- The Directors, Major Shareholders and Senior Managers of companies applying for a license will also now need to pass a fit and proper test. This is a common test which aims to prevent corrupt or untrustworthy people from entering the market.
Furthermore, Ofgem will now be launching a consultation on ongoing requirements for suppliers who are already in the market, which should be taking effect over the summer. These new proposals are simply looking to raise the standards in the industry.
The proposals will look to consider new reporting requirements for suppliers who are currently active in the market. This will also look at rules around how suppliers manage their customer credit balances, whilst also reviewing the suppliers exiting the market.
The industry has continued to grow over the last decade with far more competition in the energy market. This initially helped to raise service standards and provided more choice for consumers too. However, these steps are now being implemented due to the continued decline within the industry, of suppliers who are failing to provide an adequate level of customer service.
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Finding a trusted supplier in the energy market has never been as important as it is today. Utility Trade Group have been consulting for 10 years and have a proven track record of excellent customer service plus provision of competitive savings.
