What to do if my energy supplier goes bust?
“My energy supplier has gone bust!”
What happens when your energy supplier goes bankrupt? With the collapse of seven energy suppliers this year, it’s a question that more and more businesses are asking.
What happens if my energy supplier goes bust?
Here’s what to do if your energy supplier goes bust:
- Take your meter reading immediately
- Get in touch with the energy experts at Smarter Business. When your energy supplier goes bust, we’ll be able to set you up with a new supplier and help you avoid paying out-of-contract rates. Best of all, we’ll make it our mission to make sure that you’re paying even less for your energy than you were before!
If your energy supplier goes bust, Ofgem will move you to a new supplier so that your energy supply won’t be disrupted. This new supplier will be chosen by Ofgem. They will put you on a special “deemed” contract, which may be more expensive.
Which energy suppliers have gone bankrupt in 2018?
Seven energy suppliers have gone bust this year – a very high number when compared to only two going bust in the last nine years! The latest energy supplier to go bust, Spark Energy, was the largest electricity and gas supplier to collapse this year.
The energy suppliers that have collapsed in 2018 include:
- Future Energy
- National Gas & Power
- Usio Energy
- Extra Energy
- Spark Energy
What this number doesn’t reflect are the struggling firms that may have sold their businesses before going under.
The head of research at energy consultancy Cornwall Insight, Ed Reed, said that it’s likely that other suppliers could also cease trading soon.
In the open energy market of over 70 suppliers, more and more customers are switching to small and medium energy suppliers aside from the ‘Big Six’. But how resilient are they amid challenging times in the energy industry?
Why are energy suppliers going bust?
- Rising wholesale costs
- Tough competition
- Cold weather
- The looming price cap
- Struggling to meet renewable energy subsidy payments.
Chris Gauld, the chief executive of Spark Energy said: “There is little doubt that these are difficult times in the industry. You only have to open the newspapers to see coverage of how the price cap and wholesale costs are impacting suppliers, big and small, across the country.”
Ofgem’s response to energy suppliers going bust
To help protect consumers, Ofgem has proposed stricter rules for energy suppliers. These should come into effect late spring 2019. Under the new regulations, suppliers applying for a supplier licence will have to:
- Demonstrate they have enough funds and resources to manage their business for at least 12 months after entering the market.
- Give Ofgem a plan on how they’re going to meet their customer service obligations.
- Plan complaint-handling procedures.
- Demonstrate how they will help customers in vulnerable circumstances.
UPDATE: Tougher checks by Ofgem
Ofgem has said that new requirements would help it to “weed out” new energy suppliers who are “underprepared, under-resourced and unfit”, reducing the risk of suppliers going bust.
The regulator said that new energy suppliers will be subjected to tougher checks and tests from June 2019.
Applicants for an energy supply licence will need to:
- Show their intentions to provide proper level of customer service
- Demonstrate they can adequately fund their operations for the first year
- Show that directors, shareholders and senior managers are “fit and proper” to hold a licence
How do I know if my supplier is at risk of going bust?
Ofgem told The Sun that there isn’t a specific way for customers to check if their supplier is about to collapse, although the experiences of other customers should give you an idea of how they are doing. Read up on online reviews that rate their services.
Another sign of stress is if your supplier owes money to Ofgem in unpaid renewable energy subsidies, or has missed a payment in feed-in tariffs. However, you may not have easy access to this kind of information.
What to do if my energy supplier goes bust?
- Don’t panic! Your supply won’t be cut off!
- Get in touch for expert energy advice – at 0 cost to you! – from Smarter Business. Smarter Business have preferential relationships with reputable suppliers that have robust finances and sound business models and will compare options and find you the best deal from a reliable energy supplier.
Yet another energy supplier went bust in December 2018 – OneSelect.
The latest energy supplier to collapse was Economy Energy, which ceased trading on Tuesday 8 January 2019.
- Ofgem website
- Call Citizens Advice on 03454 04 05 06
- Email Citizens Advice via webform
- Get in touch through Ofgem’s Facebook or Twitter feed @ofgem