BP-backed energy supplier Pure Planet has ceased trading and entered the supplier of last resort (SOLR) proces. The company is said to have around 250,000 [corrected] customers.
In a blog post the founders stressed that “We recently passed our Ofgem milestone assessment with flying colours, which is designed to make sure we are a well-run, fit-for-purpose energy supplier. We had hedged the energy we promised to supply to our Members through to next spring. We were on track for our first profits at the end of this financial year. We have had a supportive backer in bp — one of the biggest energy companies in the world.”
They said the cause of its failure was the price cap, saying “We are being forced to sell energy at prices way below the true cost.
…”While we appreciate the price cap is a way to protect consumers; there is no policy designed equally to protect suppliers from the very same enormous wholesale prices rises we have seen these past few months. This creates an imbalance and the result is insolvency.”
They complained that the government had agreed to bail out large energy users but not energy suppliers, saying “Our view is that this is a deeply short-sighted approach which will increase energy consumers’ bills by more than necessary and reduce innovation”
Colorado Energy has also entered SOLR. It is said to have around 17,000 domestic customers.
Meanwhile, two other companies are in default in the Balancing and Settlement Code and unable to register new customers. They are MA Energy Limited and GoTo Energy (UK) Limited.
MA Energy supplies business customers.
GoTo Energy is a domestic supplier, its website says “We’re an energy business built on more than 25 years’ experience of sourcing energy supplies in the energy market.
“We know how to deal. We know how to get the best price. And we know how to pay for it efficiently so that we can pass the savings on to you.
“The result: jaw-droppingly good savings from a company that’s built to last and designed to offer savings on your home energy bills.”
I am a Pure Planet electricity domestic customer. According to OFGEM they have 235K domestic customers. According to Pure Planet, they had to cease trading when BP, which owns 25% of their shareholding, withdrew financial support. Does OFGEM have the power to insist a company acts as SOLR, even if they, or any of the remaining energy suppliers, don’t want to take the load and the greater financial risk?
There is useful guidance on the SOLR process on Ofgem’s website here
Before the current crisis, potential SOLR companies made offers to take on customers from failed suppliers, I assume assessing the cost and taking into account alternate recruitment costs (such as switching site commission) and often with some costs covered.
That looks much more risky now. The guidance says, “We would always prefer to be able to appoint a SoLR that had consented to the role. However, if no suitable supplier wants to be a SoLR, we will consider using our powers to direct a supplier without its consent.”