What happens if your business energy supplier goes bust
Imagine this scenario, you’ve found a great source of business energy saving with a supplier, are enjoying the most cost-effective electricity and gas supplies possible for your business and your supplier goes bust, this can happen. The market is dominated by the Big Six suppliers - British Gas, EDF, Eon, Npower, Scottish Power and SSE - which should be robust enough to withstand market forces, however there are also a large number of smaller, independent suppliers in the energy market, and there have been cases where some of these smaller operators have stopped trading. One of the earlier examples is GB Energy, which ceased trading in November 2016 due to a rise in wholesale energy prices. It served some 160,00 domestic and business customers.
The Big Six, which buy their wholesale gas and electricity in advance, are generally cushioned against price rises. Smaller independents are less able to do this. In the case of GB Energy, the company absorbed the price rises as long as it could but was ultimately victim to market forces.
Here’s what GB Energy’s Managing Director, Luke Watson, said at the time: “Due to swift and significant increases in energy prices over recent months and, as a small supplier our inability to forward buy energy to allow us to access the best possible wholesale prices, means that the position of the business has become untenable and as such we will now be entering a process overseen by Ofgem to move customers to a new supplier.”
Since then, some other smaller energy suppliers that have also gone bust including Future Energy, Iresa, Gen4U, Usio Energy, Extra Energy, Spark Energy, One Select, Economy Energy, Our Power and Brilliant Energy.
But this didn’t mean customers were suddenly without power. In every instance, the energy industry regulator, Ofgem, stepped in and a new provider was found without any interruption of supply.
If your energy supplier ceases trading
Here’s what happens if your supplier – your source of business energy saving – ceases trading.
- Your electricity or gas power supply will not be cut off
- Take a meter reading and note your account balance, so you have that information to hand if necessary when dealing with any new supplier
- The energy sector regulator Ofgem is informed by the company that it has gone bust
- Ofgem steps in to move your business and all the other customers of the defunct company to a new energy supplier – it is not advisable to switch yourself to a new provider during this transition process. Just sit tight.
- Ofgem will choose the new supplier through a competitive tendering process.
- Your old tariff will automatically come to an end and you will be put on to a ‘deemed’ tariff with the new supplier – ‘deemed’ means this is a tariff you have not chosen.
- You can stay with this deemed tariff for as long as you wish, however, the deemed tariff you will be put on with the new supplier is likely to be more expensive. This is because the new supplier will have taken a risk in taking on so many new customers (for example, having to invest in more wholesale gas and electricity to meet the increased demand). Once you are with your new supplier, then would be the time to contact them and ask to be put on the best tariff for you. This would be a good time to look at alternative suppliers because you will now be free to shop around. No exit fees apply if you leave this deemed tariff.
This is where the team at Commercial Energy Group can help. We can carry out a free price comparison and find the best business energy saving for you. You may find you end up on an even better deal than you were originally.
What if I have a smart meter?
Good question..... Ofgem will be looking for a new supplier but won’t necessarily pick one that can operate your meter in smart mode.
If this happens, the meter will continue to work but as a traditional meter – no longer ‘smart’. It should be able to operate as a smart meter once again if, when you (or the team here at Commercial Energy Group) are shopping around for a new supplier, you opt for one that operates smart meters.
What if I was in the process of switching when my supplier went bust?
Don’t worry. If you were midway through switching to a new supplier, you need do nothing as this process will continue remember, you may be in credit to the old supplier. As a business, you will need to contact the appointed receiver or insolvency company dealing with the closure to discuss money owed. If you have been paying by direct debit, this should automatically be cancelled but keep an eye on this – you may need to contact your bank and cancel it yourself to ensure you don’t carry on paying.
What if I am in debt to the supplier?
If you are in debit to the supplier which ceased trading you may need to pay the outstanding balance to your new supplier, if they take on the debt. If they don’t, you may need to pay it to the receiver or administrator for the defunct business.
What if there was an outstanding complaint?
If you had made a complaint against the defunct supplier which had not been resolved you can, if it is still relevant, raise the issue with your new supplier.
We hope this handy guide will have answered any questions or concerns you, as a business owner, might have about what happens if your supplier goes bust, taking with it your source of business energy saving. Transferring to a new supplier, and then on to another cost-effective supplier, is seamless, thanks to the intervention of Ofgem.
There’s no reason to shy away from the smaller providers, which can often provide really competitive prices for gas and electricity for business customers, and excellent levels of customer service.
Why not ask the team here at Commercial Energy Group to see what savings we can find for you on your business energy and get switching today to save up to 30% on your energy bills. Call us on 0333 305 2303 or email us on firstname.lastname@example.org. We look forward to talking to you.