Christine Farnish has stepped down as non-executive director of Ofgem in protest at the government’s lack of response to the country’s crippling energy crisis.
Farnish accused the regulator of giving “too much benefit to companies at the expense of consumers”, according to an internal Ofgem announcement that was leaked to the press.
Announced on Wednesday (17 August), Farnish announced her resignation from the Gas and Electricity Markets Authority (Gema), Ofgem’s board.
The move comes after Ofgem said it plans to increase the energy price cap further, which could surpass £4,200 in January, says Investec.
Ofgem confirmed in early August that the price cap would now be set quarterly in an effort to reduce the risk of supplier failures, and the costs of such exits.
High wholesale prices over the second half of 2021 and into the beginning of 2022 has also led to nearly 30 suppliers collapsing, along with Bulb entering Special Administration, since September.
In light of this, Farnish told The Times newspaper that she disagreed with a change allowing suppliers to recoup wholesale costs sooner.
Ofgem had implemented a change meaning an element of supplier costs associated with wholesale market hedging – known as backwardation – will be explicitly included within the cap.
Whilst it had previously suggested this would be recovered over a 12-month period, Ofgem has now announced that it would be recovered over six months, resulting in higher bills than previously forecast for the January cap, Cornwall Insight noted.
The process to replace Farnish is already underway.
