Energy company failures are largely down to poor/greedy management and poor regulation.
Companies made one or two year fixed price deals with customers, but mostly bought gas on the spot market. This allowed them to give competitive prices to customers by avoiding the costs of long term purchase commitments.
With the increase in gas prices, the revenues they signed up to no longer cover the costs. The regulator either knew this was happening and did nothing, or didn't know - both unacceptable.
The "lifeboat" - major providers agreed to take over customer contracts on existing terms. This worked when failures were infrequent and meant the larger energy companies suddenly acquired an extra customer base to whom they could then sell renewals.
The large companies now resent the very high cost of multiple failures and will no longer play ball it seems. The options - the government effectively pick up the cost, or they leave consumers in the lurch to find new more expensive providers.
Guess which is pomitically most attractive.
|