Supplier of last resort—key features
Produced in partnership with Matthew Collinson of Igloo Energy
Supplier of last resort—key features

The following Energy practice note Produced in partnership with Matthew Collinson of Igloo Energy provides comprehensive and up to date legal information covering:

  • Supplier of last resort—key features
  • What is the ‘supplier of last resort’?
  • When will a supplier of last resort be appointed?
  • How is a supplier of last resort appointed?
  • What are the criteria for selecting a supplier as an SoLR?
  • How are customers transferred from the Failing Supplier to the SoLR?
  • What are the SoLR’s obligations once appointed?
  • How is the SoLR remunerated?
  • The SoLR may charge individual customers for the supply
  • The SoLR may claim a Last Resort Supply Payment
  • More...

What is the ‘supplier of last resort’?

When the Office of Gas and Electricity Markets (Ofgem) revokes a supply licence (usually because of insolvency), it can appoint a ‘supplier of last resort’ (SoLR) on a case-by-case basis to take over the supply of gas and/or electricity to the insolvent supplier’s customers. The aim is to provide seamless continuity of service for customers. The regulatory regime for this is primarily provided for in the Standard Conditions of the supply licences held by Great Britain’s (GB’s) electricity suppliers and gas suppliers.

(For more information on GB’s energy licensing regime more generally, see Practice Notes: An Introduction to Electricity Licensing in Great Britain and The GB Onshore Gas Market and its Regulatory Framework.)

The SoLR regime applies in both gas and electricity. References in this Practice Note to ‘Standard Conditions’ are to both the Standard Conditions of Gas Supply Licences and to the Standard Conditions of Electricity Supply Licences, unless stated otherwise.

When will a supplier of last resort be appointed?

Ofgem’s Supplier of Last Resort: Revised Guidance 2016: Guidance on the supplier of last resort and energy supply company administration orders (Ofgem SoLR Guidance) states that its preferred method of ensuring continuity of service is a trade sale of the licensee whose licence is to be revoked. Because this normally happens in the context of insolvency, Ofgem describes this as the

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