Six more energy firms may go bust in months
HALF a dozen household gas and electricity suppliers are predicted to go bust in the coming months – and many more in the next few years.
The fallout of these failures can create an administrative headache for customers.
A lower energy price cap – the maximum price per unit of energy that a supplier can charge – from October and an expected rise in wholesale energy prices could put suppliers under increasing financial strain.
Alex Dickson, of switching service Switchcraft which automatically shifts customers on to cheaper deals, says: ‘A combination of the lower price cap, Brexit and winter pricing is beckoning the perfect storm in retail energy this autumn. I wouldn’t be surprised if five or more suppliers went down by the end of the year, with others to follow suit in 2020.’
In the last year, 13 suppliers have failed or withdrawn from the market. The latest casualties are Solarplicity, which shut this month, and URE Energy, which had its electricity licence revoked.
Comparison service energyhelpline estimates the market will shrink further still, from about 60 suppliers down to 45 or fewer in a ‘huge consolidation’, including mergers or acquisitions.
Co-founder Mark Todd says: ‘The energy market is starting to look like a scene from Game Of Thrones with the amount of supplier blood on the floor. We are expecting a spate of suppliers to fold or exit the market over the next six months.’
Customers’ supply won’t be turned off if their provider goes bust, and a new company will be sourced by energy regulator Ofgem. Credit from overpayments on an account are protected. However, the process is not always plain sailing. Dickson adds: ‘So far the process of moving customers has been shambolic. Householders don’t get a choice about where they are moved to and thousands have been incorrectly billed.’
Signs your supplier could be in trouble include a severe drop in customer service levels, an increase in complaints and no longer appearing on comparison websites.
Auto-switching companies like Switchcraft, weflip and Switchd can find new deals for you. Comparison website energyhelpline can also help switchers over the phone on 0800 074 0745.