JEFF PRESTRIDGE: Regulator Ofgem must get tough on the new California Gold Rush debacle

No can dispute that a freeing up of the energy supply market has been good for consumers.

It has resulted in more choice, some extraordinarily good deals offered by new suppliers and a welcome loosening of the stranglehold on the market held by the ‘Big Six’ – British Gas, EDF, E.ON, npower, Scottish Power and SSE.

Indeed, it would have been the ‘Big Five’ if SSE and npower had not just abandoned their proposal to walk down the aisle and merge till death do us part. 

Down and out: Already this year, a number of small energy firms have gone to the wall

Sadly, the ridiculously low barriers to entry have not just brought companies into the market that are intent on providing customers with good deals and quality service. They have also attracted an assortment of riff-raff, charlatans and fly-by-nights, keen to make as much financial hay while they can.

Slowly but surely these companies are being found out. Already this year, a number have gone to the wall, caught out by rising wholesale energy prices that have eroded their profit margins. 

And as sure as eggs is eggs, there will be more before the summer solstice arrives next June. 

As I report, supplier Outfox the Market seems to have got its customer service knickers in a frightful twist. 

Maybe it will survive, maybe it won’t, although the fact that it seems to have gone into near lockdown mode does not bode well.

Thankfully, households have not lost out financially as a result of any of these business meltdowns with Ofgem stepping in to find customers alternative suppliers. But it is an unsatisfactory state of affairs. 

Not before time Ofgem has latched on to the issue and is introducing tougher financial and customer service tests for companies wishing to become new suppliers.

Fine, but worryingly it is merely going to ‘consult’ on whether existing suppliers should be scrutinised more closely in future so that disorderly supplier exits can be kept to a minimum. That frankly ain’t good enough.