Ofgem selects providers for two more failed energy firms

Octopus will be supplying Avro Energy’s 580,000 domestic customers, while Shell Energy will be providing power to Green Supplier’s 255,000 consumers in the UK - as well as a small number of non-domestic customers.

The pair announced they had ceased trading last week, making it six energy companies to go out of business this month following the collapse of PfP Energy, MoneyPlus, Utility Point and People’s Energy. In total, more than 20 UK energy suppliers have gone bust since August 2020.

It comes amid record highs in energy and gas prices of the past six months due to a recovery in global demand and tighter suppliers. This is increasing the cost of heating homes and pushing up electricity prices.

Because of this, Ofgem has increased the energy price cap - which will come into effect from 1 October. As such, those on default tariffs paying by direct debit will see a price increase of £139, while repayment customers will see a price increase of £153.

There have also been strong rumours that another provider, Igloo Energy, could be added to the list of supplier casualties. Last week, Sky News reported that the firm was in talks with professional services company Alvarez & Marsal on a potential insolvency process.

The firm has now stopped taking on new customers, with a notice on its website saying “the state of the wholesale energy market is the worst we have ever seen it, with soaring prices impacting all suppliers”.

Based on the recent press coverage, it also said on its website that it’s “experiencing high call volumes”. It added “we can reassure you that your energy supply is secure and all credit balances are protected.”

Alvarez & Marsal have already been appointed as administrators of half of the energy companies to cease trading this month - these being Utility Point, PfP Energy and most recently People’s Energy. All three will be jointly overseen by managing directors Jonny Marston, Rob Croxen and Paul Berkovi.

In all three cases, Alvarez & Marsal have said they will be retaining staff in the short-term to assist the transfer of customers to their new suppliers, the raising of final bills, the credit control process and to help the joint administrators with their statutory duties.

The current state of the energy market will be high on the agenda at this year’s Utilities and Telecoms Conference, sponsored by Just - taking place on 24 November at The Midland in Manchester. To find more information about the event, click here.