Gas crisis: Head of regulator warns more customers face hit

The boss of the UK's energy regulator says "well above" hundreds of thousands of customers may be left in limbo as suppliers go bust in coming months.

Ofgem's Jonathan Brearley told MPs on the Business Committee the rapid gas price rise was "something we have not seen before" and more firms would fold.

Mr Brearley declined to say if that meant "millions" of customers would eventually need to find a new supplier.

But he insisted Ofgem had plans in place to cope as the crisis developed.

He told the committee: "We do expect a large number of customers to be affected. We've already seen hundreds of thousands of customers affected, that may well go well above that. It's very hard for me to put a figure on it."

A sixfold rise in wholesale gas prices since last year meant several domestic energy suppliers had hit financial trouble.

More would go under, Mr Brearley said, although he said commercial talks with the firms prevented him from speculating how many.

"It's not unusual for suppliers to go out of the market," he said. "I think what is different this time is that dramatic change in the costs that those suppliers are facing.

"We do expect more (suppliers) not to be able to face the circumstances we're in, but it's genuinely hard to say more than that, partly because that means predicting what may happen to the gas price."

Some critics have blamed Ofgem's domestic energy price cap for preventing suppliers from passing on the cost of more expensive wholesale gas.

But he said the cap was designed to protect consumers: "It is good that it is there."

The head of the trade body Energy UK was also giving evidence to MPs. Emma Pinchbeck said the sector had been fragile for a couple of years and the current gas crisis had exposed fault-lines in the market.

"I took this job a year ago. When I was hired, the chairman of Energy UK said that your biggest challenge is going to be the vulnerability of the retail market.

"And I know that for a year or more before that my team had been making the case to the regulator and the government that the sector is fragile.

"There's a short-term crisis here, which is in some ways out of our control - it's to do with the gas prices - but it's been exacerbated and arguably caused by our regulatory design.

"And that is a resilience and security of supply risk in the future. It's terrible news for customers in the long run."