Timeyin Akerele

And so the companies would sell these, mainly these sort of one or two year fixed products.

Now, they would buy, ideally they would buy that energy in advance for that customer.

So they would know they would, and most responsible companies did that.

But what if the price shot up during that one year and you hadn't bought energy for that customer?

Suddenly you're having to buy all that energy in the market.

The customer's still only paying this fixed price, but you're having to pay a much higher price.

And so they went out of business.

They also had people coming onto the price cap who they didn't expect.

So normally when your one-year fix finishes, a lot of customers go somewhere else.

They jump somewhere else.

But when the market seized up like it did in the middle of that crisis, they would drop onto the price cap because that's the default tariff.

If you don't pick a tariff, you stay with the supplier, but you go onto essentially the price cap tariff, the standard variable tariff.

Now that price was low because we set it six months in advance.

And so again, they were having to buy energy they didn't expect they'd have to buy.

At a much higher price because prices have shot up very quickly.

So part of the thing we did was move to a quarterly price cap.

So it much reduces that risk of disconnect between what suppliers are having to pay in the market and what actual energy customers are paying the energy supplier.

Because it's that gap that caused the huge problem for the energy company.

And like I say, the companies who had properly hedged were much better prepared, and most of them did survive.

But they still get caught by the price cap.