What happens if my energy supplier goes bankrupt?

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While most energy providers are operating without any problems, some smaller providers have gone out of business in recent years. The energy regulator has rules in place to protect consumers in the event of a supplier going bankrupt.

In short, if this happens, Ofgem will appoint a new supplier – called the provider of last resort, or SoLR – for affected customers. This new supplier will be checked by Ofgem and appointed as soon as possible to ensure that customers do not experience any interruption in their gas and / or electricity service.

Do I have to do something?

Take meter readings as soon as you realize that your supplier has gone out of business, as you will need them for your new supplier (the supplier of last resort).

Will my gas or electricity supply be cut off?

No. Ofgem’s “safety net” ensures that your energy will not be cut off if your supplier goes bankrupt.

What happens if I am a credit to my energy supplier at this time?

Your new provider will honor any credit you have accrued with your old provider under Ofgem’s SoLR rules. It takes time to transfer your account and balance, so if you want to move away from the designated provider, it’s best to wait until your account with them is set up.

How does Ofgem select the new supplier?

Ofgem says their top priority in choosing the SoLR is “to ensure that all customers continue to receive gas and / or electricity supplies.”

There are several requirements that the supplier must meet but, essentially, the supplier must demonstrate that they have the ability to take on new customers quickly and efficiently, and without significant impact on their existing customers.

The supplier of last resort must also demonstrate that it has the means and the capacity to obtain enough gas and electricity to supply these new customers at no significant cost to these customers.

Ofgem will also take into account that a supplier will voluntarily reimburse customers’ credit balances when selecting the SoLR.

If none of these suppliers volunteer to accept customers from a failing supplier, Ofgem will designate the supplier it deems best suited for the job.

So… who is the new supplier likely to be?

Ofgem will review the profile of the failing supplier’s existing customers to determine which supplier is best placed to support them, taking into consideration such elements as:

  • The supplier’s ability to manage the issuance of invoices without delay
  • Their call center capacity
  • Whether they will voluntarily reimburse customers’ credit balances

In one of the most recent examples, Green Network Energy ceased operations in January 2021. EDF Energy has been designated as supplier of last resort and the 360,000 customers of Green Network Energy will automatically be transferred to EDF Energy.

What if I don’t want to be with Ofgem’s designated provider of last resort?

You don’t have to stay with a provider of last resort, but it’s best to wait until your account is set up with the new provider before switching.

Once Ofgem has designated the new supplier, this supplier will be responsible for informing customers of the change. This review will also explain that customers are free to compare all energy providers and upgrade to a better plan at that time. You will be placed on a fare with no exit charges, so you will not have to pay extra to change.

Will I pay the same as with my old supplier?

Ofgem will appoint a supplier who will offer the best possible offer to customers. However, the new rate is not guaranteed to be the same as the old one so your bill could increase.

Your new tariff won’t have an exit fee, so once you’ve been named a new provider and your account is opened with them, you can compare prices and change if you’re not happy.

For Green Network Energy customers, the new supplier EDF Energy has committed to lower prices for all customers transferred until September 30, 2021.

What if I was on a fixed rate plan?

Unfortunately, the fixed rate contract you were on will end when you transfer to the provider of last resort.

You will be placed on a new “deemed contract” with the new supplier. However, this reputable contract will not have an early exit fee, which means you are free to find and upgrade to a new plan whenever you want.

What if I am in debt to my supplier?

Your energy debt will not be transferred to your new supplier. However, according to Ofgem, you may have to continue to reimburse the old supplier, even if they have gone out of business. The administrator will contact you in due course about the money you owe.

How to change and change energy supplier

What if I am a prepaid customer?

Just like customers on credit, customers with prepaid meters are protected by the safety net. Prepayment credit balances are already protected – any money that has been loaded on their meter can be used normally. As a priority, his new supplier will send him any new key or any other equipment necessary to recharge his meter and he will have to continue using it as before.

If people need to recharge their meter before getting their new key, they should contact their new provider. The supplier of last resort will understand the particular challenges of supplying PPM customers and will have already proven to Ofgem that it has robust systems to assist them as quickly and efficiently as possible.

Will I still benefit from the Warm Home discount from my new supplier?

If you benefit from the Warm Home discount, your new supplier must also honor it. If you are a former Green Network Energy customer, EDF Energy will continue to pay all hot house rebate payments whether you are in the main or broad eligibility group. You will receive more information about this from your new supplier.

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Shawn Beecher

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