GB Energy Supply has ceased trading
Late last week the independent supplier informed its 160,000 domestic customers that the company has started a process “overseen by Ofgem” to move them to a new supplier. The company blames rising wholesale energy prices for making its position untenable.
Market commentators predict other independent energy suppliers may go the same way: due to recent steep increases in the costs they face for buying wholesale energy. Recently, wholesale prices have almost doubled, from a ‘normal’ range of £40-£50/MWh to more than £80/MWh.
Suppliers tend to buy much of their energy requirement (the energy they supply to you) over a period of time to reduce the effect of large and sudden changes in wholesale prices, like we currently see. This practice is known as hedging. Those suppliers who haven’t hedged properly, and are buying at current wholesale prices, are the ones feeling the pressure.
What happens if your energy supplier ceases trading?
Will you be without power or gas? No: your power and gas supply are not affected.
In circumstances like this, Ofgem, the market regulator, oversees a process to ensure all customers are moved to a new solvent supplier. This process operates without any interruption to the customer’s power or gas supply.
But you may lose some money if your power or gas account was in credit when the supplier folds.
Tips in case my energy supplier ceases trading?
Yes. The best thing you can do is send your energy supplier regular meter reads and adjust your direct debit payments. This will help ensure you’re only paying for energy you actually use, and not paying for energy you haven’t yet used.
Remember, if there’s credit on your account and your supplier goes broke owing you money, there’s no guarantee you’ll get it all back. Read those meters and send them to your supplier! Most make it pretty easy & let you email in a photo of the meter reading taken on your smart phone.
Should I avoid independent energy suppliers?
No. Many independent suppliers are run very well and can ‘weather’ these events. Very large suppliers can lose money and cease trading too, just as small ones do. Size is not necessarily an indicator of whether a supplier will continue. The best thing to always do is shop around for things like great pricing and great service and stay on top of your meter reads!