Energy firms miss deadlines for warm home funding

TWO energy supply minnows have failed to meet a payment deadline for the Government’s warm home discount scheme, fuelling fears that small entrants are facing a financial crunch due to rising costs in the crowded market.

Flow Energy and Spark Energy were both expected to pay into an Ofgemrun funding pot backed by 15 energy suppliers that helps vulnerable customers by cutting up to £140 from energy bills over the winter.

In a letter to the group, seen by The

Daily Telegraph, the regulator said two suppliers missed the Dec 11 payment deadline, meaning the rest of the group will need to foot their share of the cost.

The group includes major “big six” suppliers, as well as smaller energy firms such as Ovo Energy, First Utility and Utilita.

The skipped deadline has reignited concern that the new breed of energy supply minnows may be facing unsustainable financial strain within the increasingly competitive energy market. In the wake of a major gas market price spike last week, the regulator is closely monitoring individual suppliers in an attempt to avoid a second supplier collapse in as many years.

This time last year GB Energy told its 160,000 customers that a sudden surge in energy market prices had forced it to close. The customers were rescued by a financial safety net paid for by other suppliers before Co-operative Energy agreed to take the accounts on.

A spokesman for Flow confirmed that it had deferred its payment until after Dec 31 to push the expense into the group’s next financial year.

Flow admitted last month that its troubles will have an impact on its “seasonal working capital” but stressed that it still has the backing of its lenders. Its chief executive resigned less than a fortnight ago and its shares, worth 22p two years ago, are now 0.49p.

Spark Energy, which is privately owned, initially denied any late payment but later admitted that it has agreed with Ofgem to pay the amount owed in the new year.

Ofgem has not asked Flow and Spark to stop taking on further customers.