What can SMEs learn from the GB Energy failure?

As posted earlier in the week, GB Energy, which supplied households, collapsed last weekend after it’s business became untenable in the face of very volatile wholesale energy prices.

Co-operative Energy has come to the rescue after agreeing to take on board GB Energy’s customers, who were left without a supplier and were owed millions of pounds on their credit balances.

In a statement posted on Co-operative Energy’s site, its Chief Executive says:

“GB customers on both fixed deals and standard variable tariffs will now be offered the same price as they were paying before. […] The cost of protecting customers’ balances will be partly met by Co-operative Energy and the rest will be covered by the safety net put in place by Ofgem, which is funded by a levy spread across all energy suppliers.”

This is welcome news for GB Energy’s customers, who won’t lose their credit balances.

What happens to business customers when a supplier fails?

The Ofgem safety net is designed to protect customers when a supplier fails.  It means your supply will not be cut off, and Ofgem will facilitate moving your account to a new supplier.  But, the safety net does not protect business customers’ credit balances.

This means if you’re a business, and your supplier fails and your business energy account is in credit, your money will not be protected. 

According to Ofgem:  

“[The] safety net protects all customers’ energy supplies, and all customers will be transferred to a new supplier.  Business customers’ credit balances are not protected under the safety net.”

What should business energy customers do?

Our advicedon’t run up a credit balance.  How do you do that:

  • read your meter monthly – or get a smart meter installed so you don’t have to;
  • send these readings to your supplier; and
  • adjust your DD to reflect your actual usage

It’s not worth being in credit with your business energy supplier!

Energy Scanner searches out the very best options for small business electricity and business gas.  To find a better deal on business electricity and business gas search energy-scanner.com