Citizens Advice response to Ofgem statutory consultation on modifications regarding Last Resort Supply Payment Claims
We welcome Ofgem’s efforts to smooth the impact of SoLR payments on customer bills. We agree with the policy objectives to smooth the impact on customer bills and support any future SoLR processes by improving working capital availability. We believe it is in consumers’ interests to progress these objectives. Given the expected increase in the Retail Price Cap from April 2022 and the general cost of living crisis, we think it is essential to examine all opportunities to reduce energy costs.
We recognise that this a novel arrangement and Ofgem has had limited time to provide Third Parties with the necessary level of confidence. This means it may take some time before the low-risk nature of providing this finance is fully appreciated by potential providers. We note that the consultation states only one party was ready to provide financing in the required timescales. A more competitive process may be needed to achieve the best value for consumers. It is therefore important that arrangements do not lock customers into higher than necessary interest rates.