Last Resort Supply Payment claims minded-to positions 2026: British Gas (Rebel Energy)

Details of outcome

Following the appointment of a Supplier of Last Resort (SoLR), Ofgem manages an industry process which enables the SoLR to seek to recover additional costs faced in supplying the transferred customers. This is known as a Last Resort Supply Payment (LRSP). Doing so ensures suppliers continue to come forward to act as SoLRs, and it is through this mechanism that customer credit balances are protected when a supplier fails. LRSPs are paid for by the relevant gas and electricity network operators, who then recover the cost through charges to suppliers.

We expect SoLRs to demonstrate the steps taken to minimise these costs. Ofgem decides on a case-by-case basis whether it is in consumers’ interests to grant our consent to recover costs.

In December 2021 we made temporary changes to the process for LRSP claims. The temporary process allows SoLRs that had been appointed since 1 September 2021 to submit an initial claim for immediate costs incurred, and subsequent ‘true-up’ claims for additional costs. If our assessment finds that an overpayment has been made in a previous claim, the SoLR is required to repay the excess through the same industry processes. In August 2025, we implemented licence changes to make this multi-claim process a permanent feature of the regulatory framework.

Ofgem received an initial claim from British Gas Trading Limited (British Gas) on 3 June 2026 in relation to acting as SoLR to customers of the former Rebel Energy Limited (Rebel Energy). We published our minded-to position on this claim for consultation on 25 September 2026.

We have now published our final decision on this claim. Our assessment was carried out against the relevant licence conditions and/or our criteria and methodology to determine that the costs are additional, directly incurred as part of the SoLR role, otherwise unrecoverable, and economic.

The publications include our decision and consent documents to enable the relevant payments to take effect.

Read the full outcome

Original consultation

Consultation description

Following the appointment of a Supplier of Last Resort (SoLR), Ofgem manages an industry process which enables the supplier to seek to recover additional costs they face in supplying the transferred customers. This is known as a Last Resort Supply Payment (LRSP). Doing so ensures suppliers continue to come forward to act as SoLRs, and it is through this mechanism that customer credit balances are protected when a supplier fails. LRSPs are paid for by the relevant gas and electricity network operators, who then recover the cost through charges to suppliers.

We expect SoLRs to demonstrate steps taken to minimise costs. Ofgem decides on a case-by-case basis whether it is in consumers’ interests to grant our consent to recover costs.

In December 2021 we made temporary changes to the process for a SoLR to make a claim for an LRSP. The temporary process allowed SoLRs that had been appointed since 1 September 2021 to submit an initial claim for immediate costs incurred, and subsequent ‘true-up’ claims for additional costs. In August 2025, we implemented licence changes to make this multi-claim process a permanent feature of the regulatory framework, with new SoLRs also signing a deed of undertaking to facilitate this.

We have now assessed the initial LRSP claims made by British Gas Trading Limited and have published our minded-to position on the claims received by Ofgem. Our assessment was carried out against the relevant licence conditions and/or our criteria and methodology to determine that the costs are additional, directly incurred as part of the SoLR role, otherwise unrecoverable, and economic.

Who should respond

• Gas and electricity suppliers
• Electricity distribution network operators
• Gas transporters
• All other interested parties