Beware your Gas company may have shut down
Avro Energy and Green have collapsed, becoming the latest firms to be brought down by the sharp rise in gas prices.
Combined with other recent failures, it means 1.5 million people are now facing a switch to a new, more expensive firm.
All affected customers will continue to receive energy while a new supplier is appointed by regulator Ofgem. Its price cap limits how much firms can charge.
The regulator earlier warned the rise in gas prices was “unprecedented” and meant more firms would go bust,
Avro Energy, the biggest supplier to exit the market so far, has 580,000 customers, while Green Supplier Limited has 250,000.
Since the sharp rise in wholesale gas prices – which firms complain they are unable to pass on to customers because of a price cap on energy bills – a number of small companies have collapsed.
They include People’s Energy, Utility Point, PfP Energy and MoneyPlus Energy. Together, the recently failed companies account for more than 5% of the market, about 1.5 million customers.
Meanwhile Bulb, the UK’s sixth largest energy company with 1.7 million customers, is seeking financing. And another firm, Igloo, has said it is working with restructuring consultants Alvarez & Marsal. But Igloo told the BBC it had not appointed administrators.
If an energy firm collapses, customers are automatically switched to a tariff provided by the new supplier. This is a payment plan agreed with the regulator Ofgem, but it may well be more expensive than the deal they had with the former company which went bust.
Customers are advised to not try and switch to a new supplier until they are contacted by whoever Ofgem appoints to take over their account.
Hard to calculate
Ofgem boss Jonathan Brearley, warned earlier more customers would be affected.
“We’ve already seen hundreds of thousands of customers affected, that may well go well above that. It’s very hard for me to put a figure on it.”
Appearing before the cross-party Business Committee on Wednesday, he declined to say if the number of customers that would eventually need new suppliers could run into “millions”.
Mr Brearley insisted that Ofgem had plans in place to cope as the crisis developed. He told MPs that Ofgem “war-gamed” various scenarios.
BBC
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