2026-024 Legal Support for Financial and Insolvency Matters

Description

Following the introduction of the Financial Resilience Principles, Ofgem has been required to assess complex corporate and financial structures of energy suppliers. This requirement has become even more significant following the introduction of standard licence conditions on 31 March 2025, which oblige suppliers to satisfy both the Capital Floor and Capital Target. Ofgem therefore requires support from a supplier for short-term legal support services to augment the internal legal team, with a primary focus on delivering specialist technical legal advice in areas where the internal team may lack expertise. This support will be particularly directed towards advising on complex financial legal matters concerning a supplier's position. Ofgem will also require legal advice in respect of the practical applicability of enforcement of the Financial Resilience Principles (e.g., dealing with conflicting interpretations of definitions and interpretative analysis). It may also be necessary for this advice to address strategies for handling risks related to possible supplier insolvency.