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Ofgem steps in as two more energy suppliers fail

gas, Ofgem, price caps

High gas prices are causing failures

Two more energy suppliers have ceased trading, confirming speculation that Ofgem would be forced to take further action.

Pure Planet supplies gas and electricity to around 235,000 domestic customers and Colorado Energy supplies gas and electricity to around 15,000 domestic customers.

Under Ofgem’s safety net, customers’ energy supply will continue and funds that domestic customers have paid into their accounts will be protected, where they are in credit.

Domestic customers will also be protected by the energy price cap when being switched to a new supplier.

Customers of these suppliers will be contacted by their new supplier, which will be chosen by Ofgem.

In recent weeks there has been an unprecedented increase in global gas prices which is putting financial pressure on suppliers.

Ofgem is working closely with government and industry to make sure customers continue to be protected this winter.

Neil Lawrence, director of Retail at Ofgem, said: “Ofgem’s number one priority is to protect customers. We know this is a worrying time for many people and news of a supplier going out of business can be unsettling.

“I want to reassure affected customers that they do not need to worry: under our safety net we’ll make sure your energy supplies continue. If you have credit on your account the funds you have paid in are protected and you will not lose the money that is owed to you.

“Ofgem will choose a new supplier for you and while we are doing this our advice is to wait until we appoint a new supplier and do not switch in the meantime. You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your tariff.

“Any customer concerned about paying their energy bill should contact their supplier to access the range of support that is available.”

These latest failures follow a growing list of smaller energy firms who have been unable to supply customers at agreed lower prices.

The crisis has so far impacted on companies with more than 1.7 million customers, leaving Centrica’s British Gas, EDF Energy and Octopus Energy to step in and take over their accounts.

Among the companies which have collapsed have been Scotland-based People’s Energy, as well as Igloo Energy, Utility Point and Avro Energy which had 580,000 customers and was the biggest to fall.

Ofgem has lined up restructuring experts from Teneo to act as special administrator if a large supplier should collapse.

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