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clear sky
3.6 ° C
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Tuesday, November 30, 2021

Eleven more energy suppliers on the brink of collapse as bills set to rise


More energy companies are struggling to balance their books, experts warn, as they cannot pass on the soaring cost of gas to consumers and so have no choice but to fold

Young couple worried about their finances at home. They are wearing pajamas and drinking first coffee of the day at the kitchen.
Experts say most energy companies could go out of business, and prices will rise

Eleven energy companies are on the brink of stopping trading, following a disastrous year in which 25 have already failed .

Accountants Price Bailey have looked into the credit risks of all energy firms still trading and registered with Ofgem, the regulator.

It found that there are 11 at maximum risk of failing, the Sun reports .

Price Bailey partner Matt Howard said the issue means energy bills will have to rise.

He said: “This time next year we will have far fewer suppliers and higher household energy bills.

“Every time a supplier goes bust the costs of the remaining suppliers increase, which makes those businesses more vulnerable.

“It’s possible that only one or two of the challenger brands will be left standing alongside the big six this time next year.”

Providers of energy have been going out of business as they cannot pass all the rising cost of gas on to consumers due to an energy price cap.

What do you think about this story? Let us know in the comments below








Ofgem regulates energy companies in the UK – and sets a price cap on how much they can charge customers
(

Image:

Corbis via Getty Images)



This cap is currently £1,277 a year for people using average amounts of energy, and it is set by the regulator Ofgem.

Energy providers say the price cap means they have to sell energy for far less than it costs them to supply.

This imbalance means many have had to stop trading.

Yesterday energy provider Bulb announced it would be bailed out by the taxpayer as it seeks to avoid going out of business.

Bulb is the seventh-largest energy firm in the country , with 1.7million users.

All of its energy comes from green, renewable sources.

A Bulb spokesperson said: “We’ve decided to support Bulb being placed into special administration, which means it will continue to operate with no interruption of service or supply to members.



“If you’re a Bulb member, please don’t worry as your energy supply is secure and all credit balances are protected.”

This basically means taxpayer cash will be used to keep Bulb going for now.

Bulb is the first energy provider to go into special administration.

An administrator will try to help by arranging a sale of Bulb, or restructuring it in some way.

The industry forecasts the number of suppliers in the market to fall to just 10 by Christmas. That compares to 71 in January this year.



What to do if your energy firm stops trading

If your energy firm collapses, the advice from Ofgem is to sit tight and wait until your new supplier contacts you.

You should wait until you know which firm you’ve been moved to before you decide to look into switching elsewhere .

In the meantime, take a meter reading for when your new supplier contacts you so it can correctly bill you.

It is important to check prices as soon as you know which deal you’ve been moved to, as you may not necessarily be transferred over to the cheapest supplier.

You won’t be charged exit fees for switching away from your new energy provider.


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