Parliament’s spending watchdog today accuses Ofgem of messing up the market and increasing gas and electric bills.
A report by MPs on the Public Accounts Committee says the energy regulator set the bar too low for new companies to set up as suppliers.
And as a result households have paid £2.7billion more than needed costing an average £94 each.
Chair Dame Meg Hillier said: “We have regulators to set the framework to shore us up for the bad times.
“Problems in the market were apparent years before the unprecedented spike in prices and Ofgem was too slow to act. Households will pay dear.”
The MPs say Ofgem’s failure meant 29 energy suppliers serving 4 million customers have failed since July last year.
The MPs’ report adds: “Ofgem did not strike the right balance between promoting competition and ensuring energy suppliers were financially resilient.”
MPs have ordered Ofgem bosses to explain within six months what they have done to improve their performance.
And they recommend more continuity plans be put in place to protect customers when firms go bust and for Ofgem to review the way it sets the energy price cap.
GMB union boss Andy Prendergast said: “The Government’s remorseless attempt to use the market to regulate energy has been a massive disaster that has left millions of households worse off.
"The market may be the right solution when it comes to selling tins of beans but has been an abysmal failure when applied to energy."
