Energy sector in turmoil as another supplier closes
● One Select had 30,000 customers ● Ofgem reassures service users
One Select, an energy supplier with about 36,000 domestic customers, has become the latest small utility firm to cease to trade after Extra Energy and Spark Energy collapsed last month.
Ofgem said that household energy supplies would not face interruption and added that it will choose a new supplier to take on One Select’s customers.
Extra Energy collapsed at the end of November, while Borders-based Spark went into administration two days later, becoming the seventh small energy supplier to cease trading this year amid severe turmoil in the sector.
The failures came in a week when the regulator announced that new energy suppliers may have to pass financial and customer service tests in order to obtain a licence under Ofgem regulations, proving that they have adequate financial resources and can meet their customer service obligations.
One Select, which is based in Reading, said on its website: “Oneselect has ceased to trade. We apologise for any inconvenience this may cause. Ofgem, the energy regulator, is appointing a new supplier for its customers. Customers need not worry, their supplies are secure and credit balances are protected.” Consumer groups said that a high level of switching, combined with pressures from last winter’s cold weather, had left small suppliers in a vulnerable position.
Emma Bush, energy expert at uswitch.com, said: “Well run small suppliers not only offer cheaper tariffs but also outperform the bigger players in areas like customer service, green energy, and easy account management.
“Although a small number of energy companies have ceased trading this year, the Ofgem safety net means their customers have nothing to fear as their energy supplies will continue uninterrupted and their credit balances are protected.
“A handful of suppliers entered the winter period with little room for manoeuvre. Unexpectedly high demand thanks to the Beast from the East has helped push up commodity costs, while switching volumes have reached nearrecord levels.”
She added: “Companies which have less capital available, have been struggling to pay policy obligations, or are having problems with internal processes such as billing or collecting payments are therefore going to find conditions challenging in the current environment.”
Philippa Pickford, Ofgem’s interim director for future retail markets, said: “Our message to energy customers with One Select is there is no need to worry, as under our safety net we will make sure your energy supplies are secure and your credit balance is protected.
0 About 36,000 domestic customers will be affected by the collapse
“Ofgem will now choose a new supplier for you, ensure you get the best deal possible. Whilst we’re doing this our advice is to ‘sit tight’ and don’t switch. You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your new tariff.”
She added: “We have seen a number of supplier failures this year and our safety net procedures are working as they should to protect customers.”
Last week, Economy Energy denied that it was going out of business. “We at Economy Energy have no intention of closing our doors,” it said. There’s been an increase of homeowners aged 55 plus, accessing a lump sum of money from their home, without having to sell or move out.
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