The boss of British Gas owner Centrica has called for rival Octopus to be banned from taking on new customers as it accused the UK’s energy watchdog of failing to uphold its own rules.
Chief executive Chris O’Shea claimed it was “criminal” that Ofgem has not stepped in to take action against three firms that are understood to have failed to meet financial resilience targets – with Britain’s biggest energy supplier Octopus among them.
He demanded that the regulator stops the suppliers from taking on new customers, claiming that Ofgem is not properly enforcing the rule that came into force earlier this year.
This could leave the sector at risk of another possible future wave of firms going bust, similar to that seen in the 2021-22 energy crisis, he warned.
On announcing half-year results, Mr O’Shea said: “Ofgem is not applying its own rules.
“They’re increasing the risk of systemic failure in the market.”
He said it was “criminal” that Ofgem is putting the industry in a “situation where that could happen again”.
“It’s simply about protecting customers and asking the regulator to enforce its own rules,” he added.
Ofgem has not revealed which suppliers have failed the test, but Octopus – which supplies more than seven million households – has confirmed it did not meet the targets for capital adequacy by the April 1 deadline.
It said it has, however, agreed a plan with Ofgem to reach the target, which means it is not in breach of the rules.
An Octopus Energy spokesperson said: “This is yet more naked self-interest from British Gas.
“They would do well to obsess about their customers rather than their rivals.
They added: “We fully comply with Ofgem’s rules and our resilience meant we not only thrived through the energy crisis but bailed out Bulb – saving British billpayers billions.”
Ofgem also confirmed that firms that have agreed a plan to meet resilience targets are not breaching its rules and therefore do not need to have sanctions put on them, such as being banned from taking on new customers.
A spokesperson for Ofgem said: “Our financial resilience controls are clear that where a supplier is not meeting the capital target but has a credible and agreed plan in place that is not a breach of the rules.
“Capitalisation plans come with restrictions and controls. We expect suppliers to deliver on those plans and adhere to their restrictions and are monitoring closely.”
