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Will New Ofgem Vulnerability Rules Increase Pressure on Utilities Sector?

30 November 2020

Profitability of energy retailers is at historically low levels and is likely to deteriorate further as a consequence of Covid-19. 

The increasing risk associated with bad debt has been recognised by Ofgem in considering a £21 charge per household to allow suppliers to recover the higher bad debt costs. 

The additional £21 charge will be welcomed by energy retailers but it’s highly unlikely to offset the additional costs that will be borne by energy retailers as a result of: 

  • Covid-19
  • Increasing competition and switching
  • Increasing volume of vacant business properties
  • Changing and evolving regulation 

There are likely to be further energy retailers that cease trading in 2021 and beyond. 

In recent times the following companies have ceased trading with their customers being absorbed by larger retailers such ScottishPower, British Gas, Bulb, Octopus Energy and EDF Energy:

  • Toto Energy
  • Tonik Energy
  • Effortless Energy
  • Gnergy 
  • Breeze Energy
  • Rutherford Energy 
  • Eversmart Energy

Other energy retailers have been or are involved in distressed sales:

  • Bristol Energy
  • Robin Hood Energy 
  • Yorkshire Energy 

Just works with energy retailers to help them reinvent themselves and address and mitigate, the rapidly rising risk of bad debt and collection costs.

Such costs are probably the most significant costs for most energy retailers after wholesale energy settlement charges.

We strongly believe that collections and recoveries activity provides a unique lens in identifying the root causes of process defects that drive up your cost to serve. Just can help to:  

  • Reduce collection costs through digitalisation
  • Mitigate risk of bad debt by capitalizing on data quality
  • Accelerate and increase cashflow
  • Improve data quality through effective data strategies
  • Ensure earlier engagement of the customer
  • Ensure earlier repayments for both customer and creditor
  • Improve vulnerability detection.

We are confident that we can deliver value that is far in excess of its fees as a result of our unique enforcement market integration approach. By leveraging our technology and network expertise you can address pressing problems/challenges in your business. What's more, we only charge a fee when we collect on unpaid debt.

We focus on providing solutions through our technology platform, JustHub, which is built on Salesforce PaaS ensuring enterprise class cybersecurity and data protection. Our strategy is to minimise the input required by clients and allow them to focus on business as usual activities whilst we identify and develop solutions that deliver sustainable and recurring benefits.