Predominantly energy suppliers operate without any issues, but with the recent news of energy demand and prices rises, the number of small suppliers going out of business has dramatically risen given the state of the energy market.
The government regulator for gas and electricity markets in the UK, Ofgem, is responsible for looking after customers and will be overseeing the appointment of a new supplier. In the meantime, here are some fast answers and advice to help you:
Will I lose my electricity and gas supply?
No. Your energy supply won’t be disrupted as energy regulator Ofgem will move you to a new supplier. The switch will be so minimal that you won’t notice any change. The only real difference will be gas and electricity bills issued from a different supplier.
Will I have to find a new supplier?
Ofgem will appoint another energy company to take over the business which has gone bust. Ofgem puts the case out to tender, and other companies compete to offer the best deal. Once a new supplier has been appointed, they will contact you, so there’s no need for you to look for a new supplier.
So, what do I need to do? Will my tariff change too?
Take a meter reading as soon as you hear your supplier has gone bust. Don’t switch to a new supplier straight away – wait until the new supplier appointed by Ofgem contacts you to see the terms of their new tariff.
You can then decide whether to shop around for a better deal. As far as your direct debit is concerned (if you pay by this method), your new supplier will tell you what’s going to happen regarding future payments.
Will it be more expensive than my old tariff?
The cost of the tariff will be subject to commercial negotiations between Ofgem and the companies bidding for your old supplier’s business. Ofgem secures the best possible deal, but the new supplier might charge a relatively high amount to cover the cost of taking on the new business.
When GB Energy collapsed in November 2016, the new supplier, Co-operative Energy, chose to honour the existing terms and conditions, which meant GB Energy customers continued to pay the same rate as previously and stayed on the same type of tariff.
What if I’m a prepayment customer?
You’re fully protected by the Ofgem safety net. If you’ve got credit, it will be honoured.
What if I’m in credit or in debt with the old supplier?
Your new supplier, working with Ofgem, will honour any credit you have. The energy supplier will contact you to discuss the details. For instance, it might credit the money to your new account to create a balance. It’s more than likely the debt will transfer across to the new supplier.
What if I am already mid-switch when my old supplier goes bust?
The process will continue, and you’ll be moved to the new supplier.
For more information on what to do with your supplier or how you can search the market for a better tariff, head over to the Trufl website.