Ovo has turn out to be the newest main vitality provider to reveal its failure to satisfy new capital adequacy guidelines imposed by the trade watchdog.
Octopus Vitality, which has overtaken British Gasoline to turn out to be Britain’s largest family vitality provider, publicly revealed its personal non-compliance with the principles earlier this 12 months.
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On Friday, Greg Jackson, Octopus Vitality’s founder and chief govt, described the framework as “crude” in an interview with the Monetary Occasions.
In keeping with measures launched by Ofgem, vitality suppliers should maintain a sure degree of money or different tangible property on their steadiness sheets, with the brink set in line with the variety of prospects they’ve.
A latest change to the principles, which eliminated intangible property from the calculation, meant that quite a few firms, together with Octopus Vitality and Ovo, weren’t technically compliant.
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The capital adequacy threshold is known to work out at roughly £115 per dual-fuel buyer.
A spokesperson for Ovo stated: “We have taken proactive measures to align with Ofgem’s new capital rules, working constructively to meet the requirements.”
Ovo was catapulted into the trade huge league when it purchased SSE’s residential provide arm.
It now has 4 million prospects.
The corporate, like Octopus Vitality, has a provide association with Shell, which it argues considerably strengthens its monetary resilience.
