What happens if my energy supplier goes bust?
Since 2021, a total of 31 energy companies have gone bust due to the rising wholesale costs of gas. This has left over two million domestic and commercial customers relying on the market regulator, Ofgem, to maintain their suppliers and credit balances. But what happens if your energy supplier goes bust and how can we help?
Why are suppliers going bust?
Most suppliers use a tactic called ‘hedging’ to buy their energy. This involves buying in advance and in bulk. This helps to reduce the risk involved as even if prices change, they’ll have bought enough energy to keep making a profit and stay competitive. Some energy suppliers won’t have bought enough energy in advance and were faced with sky high wholesale prices. If their customers are on fixed prices, they’ll have to sell at a loss.
What happens if my supplier goes bust?
The most important thing to remember is that if your supplier goes bust, you won’t lose your energy supply. Ofgem, the market regulator, has systems in place to make sure that your business doesn’t lose its supply. You’ll be automatically moved to another supplier chosen by Ofgem to avoid any disruption. Any credit on your account will also move to the chosen supplier so you won’t lose any money. Your new supplier will then be in touch to give you more information about them and the tariff you’re on.
Will my bills go up if my energy supplier goes bust?
It’s likely that your bills are going to go up if your energy supplier goes bust. When Ofgem switches you to a new supplier, you’re probably going to be put on a deemed tariff. These are rolling contracts lasting 28 days and are some of the highest rates in the market. Even if you switch suppliers or tariffs, you may still see higher energy bills. Your supplier could have gone bust because they were selling at too low of a rate. So, you’re unlikely to find the same low costs elsewhere.
What do I need to do if my energy supplier goes bust?
While the switching process will happen through Ofgem, there are some steps you’ll need to take yourself. It’s important that you take a meter reading once you’ve been made aware that the supplier has gone bust. This helps to make sure that your final bill from your supplier is accurate. It also means that you can start fresh with your new account with accurate readings. It’s also a good idea to take a look at your bills and check your balance with your old supplier. From this, you’ll be able to know whether you’re in credit as this will move to the new supplier too.
How can we help if your supplier goes bust?
Our team of experts are on hand to help you if your supplier goes bust. Deemed tariffs are usually around 80% higher than the cheapest tariff available from your supplier. This is because they don’t know how much gas and energy you’ll need to power your business. We’ll be able to guide you through the whole process. If you want to stay with the new supplier, we can help you to negotiate cheaper rates for your business. Or we can help you switch to a more competitive supplier. We’ll manage the switching process to ensure that it all goes smoothly.
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