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Energy chaos as two million homes forced to find new suppliers after firms collapse


This comes as nearly two dozen firms have now collapsed since the beginning of the crisis in August. As a result, a total of 2,076,800 domestic customers have been forced to switch gas suppliers, according to recent Ofgem figures analysed by the i-Paper. Meanwhile, 58,300 non-domestic users have been in the same position.

The crisis was triggered by a surge in wholesale gas prices earlier this year which left firms struggling to afford it, as the consumer energy price cap prevented them from passing on the rising costs.

The chaotic switches to new energy suppliers, picked by regulator Ofgem, has often resulted in an increase in gas and electricity bills, while in some cases customers are left without a new supplier for weeks.

David Duckworth, founder of Rowan Energy, warned many more companies will face the same fate.

Speaking to the i-Paper, he said: “Businesses that run at a loss cannot do so for long periods.

“Unless the government and regulators can come up with a solution to UK gas supply issues, we are going to see more and more of these smaller companies go under, taking away the competitive and fair energy market, ultimately resulting in increased energy bills.”

Earlier this week, two more firms – Neon Reef and Social Energy – both collapsed.

To make matters worse, many customers of firms that claim eco-friendly credentials, like Pure Planet and Green, have been automatically switched over to Shell Energy, a subsidiary of the multinational oil giant.

Around 536,000 customers from five different suppliers with sustainable credentials were switched over to Shell.

READ MORE: Thousands hit as ANOTHER UK energy firm collapses

239,000 customers saw their energy supplier switched over to E.ON, while 459,700 customers switched to British Gas.

Despite the fact that customers are able to move on from their assigned “supplier of last resort” without exit fees, switching in the current market is likely to leave them with even higher energy bills, price comparison experts have warned.

The escalating crisis comes as we move into the winter months, exacerbating the impacts of fuel poverty.

National Energy Action’s Peter Smith said that “vulnerable consumers”, such as those on Universal Credit, are at risk.

He said: “Issues can arise over compatibility with their new supplier’s top-up card, risking them losing supply. Four in 10 claimants of Universal Credit are on prepayment meters so some of the most vulnerable could be affected by this issue.

“We also have concerns over those who are on debt repayment plans and whether these are carried over to the new supplier.

“We want Ofgem to ensure vulnerable consumers aren’t put at risk when their supplier fails and provide deeper protection for low-income consumers.”

Meanwhile, the coordinator of the End Fuel Poverty Coalition, Simon Francis, said: “Any collapse of an energy supplier reduces the choice consumers have and leaves the public in the hands of an ever-decreasing band of companies to pick from.

“With less competition and less ability for consumers to switch, energy prices will rise and fuel poverty numbers will increase.

“The current system is broken and the government needs to provide far more support for people facing fuel poverty this winter.”

An Ofgem spokesperson said: “We know this is a worrying time for many people. The energy price cap covers around 15 million households and will ensure that consumers don’t pay more than is absolutely necessary this winter.

“Any customer worried about paying their energy bill should contact their supplier to access the range of support available.”

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