Two more failures mean half a million domestic customers and 1000 businesses need new supplier

Two energy suppliers, Utility Point and People’s Energy, have announced that they are ceasing to trade. Utility Point supplies gas and electricity to around 220,000 domestic customers. People’s Energy supplies gas and electricity to around 350,000 domestic customers and around 1,000 non-domestic customers.
Under Ofgem’s safety net, the energy supply of Utility Point and People’s Energy customers will continue and outstanding credit balances of domestic customers will be protected.
Customers of Utility Point and People’s Energy will be contacted by their new supplier, which will be chosen by Ofgem.
The failures come just a few days after Ofgem appointed  British Gas to take on PfP’s 82,000 domestic customers and 5,600 non-domestic customers, and MoneyPlus Energy’s approximately 9,000 domestic customers, after the two companies also failed on 7 September. They were switched to British Gas on 11 September.
E.ON Next Energy Limited took on Gas and Power Limited’s gas and electricity customers. The supplier has told Ofgem in July that it was in severe financial difficulties.
Ofgem’s advice to customers whose energy supplier fails is to:
Not switch to another energy supplier until a new one has been appointed and you have been contacted by them in the following weeks.
Take a meter reading ready for when your new supplier contacts you.

Meanwhile Ofgem has issued a provisional order to Avro Energy after the supplier failed to provide information requested by the regulator. Ofgem said the particular behaviour of concern as that Avro had failed to provide financial and other information requested by Ofgem. The Information was requested on 19 August 2021.
Commenting on the failures, Doug Stewart, chief executive of supplier GreenEnergyUK (GEUK), said “With four suppliers going bust in the space of a week, isn’t it time to stop and consider once again the wisdom of allowing energy suppliers to take money up-front from their customers? People’s Energy had recently taken on 200,000 customers through auto-switching and this will make the unravelling of their finances and the return of prepayment direct debits a massive challenge to sort out, and will increase the costs for all well-run energy suppliers as they once again pick up the tab for these failed companies.”

He added, “Surely the writing is on the wall, in the midst of wholesale energy prices increasing, that those suppliers seeking more cash by signing up more customers and taking advance payments to plug their cash hole is irresponsible and simply serves to increase the bill for the safety net. It’s time that Ofgem was empowered to stop energy suppliers taking up-front cash from new customers to use as risk capital when they are unprofitable; it would at least prevent the absolute amount of money at risk within the safety net from increasing further. I fear that there will be more suppliers going bust in the coming weeks.”
Read our April 2021 interview with Doug Stewart here

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