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Ofgem director Christine Farnish resigns

BBC News logo BBC News 8/17/2022
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A non-executive director at energy regulator Ofgem has quit, amidst surging energy prices in the UK.

Christine Farnish reportedly handed her resignation to the business secretary Kwasi Kwarteng earlier this month.

The watchdog - which has an important role in setting price caps on bills - had come under criticism over rising household energy costs this winter.

Ms Farnish told The Times that energy companies gave "too much benefit to companies at the expense of consumers".

The BBC has approached board member Ms Farnish for comment.

A spokesperson from the government's business department said: "We are aware of a resignation at the Board of Ofgem, which has been accepted."

A spokesperson from Ofgem said: "We are thankful to Christine for her many years of devoted service to Ofgem.

"Due to this unprecedented energy crisis, Ofgem is having to make some incredibly difficult decisions where carefully balanced trade-offs are being weighed up all the time. But we always prioritise consumers' needs both in the immediate and long term," the spokesperson added.

The regulator has faced criticism for raising the energy price cap - the maximum amount suppliers can charge customers in England, Scotland and Wales for each unit of energy - this October.

The cap is designed to protect consumers from short-term price changes and is adjusted by Ofgem every three months - based on the price energy suppliers pay producers for electricity and gas.

Consumer rights campaigner Martin Lewis has previously accused the regulator of "selling consumers down the river".

October's price cap is due to be announced at the end of this month.

Energy industry analysts Cornwall Insight predict an average annual bill will reach £3,582 at this point - £200 higher than the previous estimate.

In January 2023, the next time the cap is due to be changed, Cornwall Insights expects the cap to go up again to £4,266.

The higher estimate means the average household would be paying £355 a month, instead of £164 a month currently.

Energy prices have risen sharply because demand for gas increased when Covid restrictions eased, and because the war in Ukraine has threatened supplies from Russia.

Ofgem recently changed the rules so the cap can be revised every three months instead of every six, saying this would make it less likely that more energy suppliers would collapse.

The regulator faced criticism for failing to prevent the collapse of 29 energy suppliers last year.

In response to the resignation, an Ofgem spokesperson said that the rest of the board members had decided a shorter recovery period for energy costs was in "the best interest" of consumers in the "long term" because it reduced the "very real risk of suppliers going bust, which would heap yet more costs onto bills and add unnecessary worry and concern at an already very difficult time."

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