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Failing energy firms will cost UK consumers £2.7bn, says watchdog

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Consumers will need to pay £2.7bn to cover the costs of 28 energy suppliers failing since June 2021, according to the government’s spending watchdog.The National Audit Office (NAO) said bill payers had “borne the brunt” of the failures and accused energy regulator Ofgem of creating a market “vulnerable to large-scale shocks”.A swathe of energy suppliers have collapsed over the past year as a sixfold spike in the cost of wholesale gas between February and December 2021 crippled companies who were unable to increase costs to customers because of the government’s energy price cap.Ofgem had embarked on a drive to open up the market to smaller players before the price crunch.

But big energy suppliers have argued that new entrants should have hedged greater proportions of their energy.The failures are expected to cost about £94 per customer.

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