Credit, Collections & Insolvency News
Delta Gas and Power has been banned from acquiring new customers after failing financial stress tests by Ofgem. The regulator has also revealed it is preparing to issue a statutory consultation later this month on proposed licence modifications designed to further strengthen supplier financial resilience.
Delta is a non-domestic energy supplier, serving 1,690 business customers in the UK.
Ofgem says that Delta has shown through recent engagement that it has been unable to show it is financially resilient in the current volatile energy market following a ‘stress test’ by Ofgem which required all non-domestic suppliers to provide information relating to their financial resilience.
As a result of this exercise, Delta is failing to meet the Operational Capability Principle and the Financial Responsibility Principle, which are cornerstones of Ofgem’s regulations.
Business customers of Delta should be reassured that there is no action for them to take. Ofgem will continue to engage closely with Delta on these matters whilst the Provisional Order is in place.
As Ofgem set out at the end of last year all suppliers must demonstrate that they are sufficiently resilient, as every time an energy company fails, this comes at a cost to consumers.
Cathryn Scott, Ofgem’s Director for Enforcement & Emerging Issues, said “Protecting consumers and businesses is our top priority and, as energy regulator, we set the bar high for suppliers to minimise their chance of failure in a tough market and to ensure customers are protected.”
“Our robust risk assessments examine a supplier’s ability to provide customers with an essential service like energy and we have concerns about Delta’s finances. We regularly monitor suppliers’ compliance with financial resilience, operational and customer service obligations. Where suppliers do not comply with these obligations, we will not hesitate to take action.”