What do you do if your energy supplier stops trading?
With energy price volatility causing fluctuations and uncertainty in the market place, it is no surprise that some of the smaller independent suppliers are finding it hard to keep prices low.
The first supplier to fall victim to rising prices and challenging customer expectations in a decade were GB Energy, who ceased trading in November 2016.
In a statement on their website by the Managing Director, Luke Watson, it was claimed that:
“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.”
Customers were told that, during this process, all contracts would be honoured and that they will be contacted by their new supplier in due course.
As a business energy consumer, you may be questioning what you should do if your supplier ceases trading and what rights do you have if this does occur?
The Ofgem Safety Net
Ofgem are the Office of Gas and Electricity Markets, a non-ministerial government department who independently monitor the energy market, working on behalf of consumers to ensure their interests are protected.
When a supplier ceases to trade, Ofgem step in to make sure supply continues and contracts are honoured.
Ofgem take responsibility for finding the customers of the closed company a new supplier and will do their utmost to ensure that you don’t even notice a transition.
What about my contract?
While GB Energy have claimed that all customer contracts will be honoured during the transition process, once Ofgem have chosen a new supplier all old tariffs will end and customers will be transferred onto a ‘deemed’ contract.
A ‘deemed’ contract is one that you, as a customer, have not chosen. It’s likely that prices on this contract will be more expensive. This is due to the fact that the new supplier will be taking on risk, accepting new customers without them being subject to the usual background credit checks.
It should also be noted that, under the Ofgem safety net, business customers’ credit balances are not protected and it is therefore your responsibility to contact the insolvency company and request advice on the best course of action.
What happens next?
Once Ofgem have selected a replacement, the new supplier will get in touch with you and provide guidance on outstanding credit balances.
Once you have been contacted by your new supplier you are then free to shop around for a cheaper deal (you should refrain from switching supplier during the transition process).
When the time comes, you can either spend time and energy shopping around for a cheaper deal, negotiating with numerous alternatives or you can let Love Energy Savings do all the hard work for you.
We compare 150 different tariffs from 18 different suppliers including the Big Six and most independent energy suppliers.
Here at Love Energy Savings we work on your behalf to negotiate a cheaper deal and will always be on hand to offer advice and help orchestrate a seamless and hassle-free switch.
It takes seconds to see if you could be on a cheaper tariff, simply enter your postcode on our business energy page to perform a free, impartial business energy comparison or call one of our energy experts today on 0800 9888 375.
For more information, Ofgem have issued a document entitled ‘Guidance on supplier of last resort and energy supply company administration orders’ which can be viewed here.