What Happens when your Energy Supplier goes Bust?

It will come as no surprise to anyone who’s responsible for paying the bills, that prices for everything from food to energy are rising rapidly. The price of wholesale gas has skyrocketed by a massive 250% just since January alone, and there’s no sign of things abating. As some UK energy suppliers struggle to continue and keep up with demand, you may be wondering what happens if your energy supplier goes bust? Let’s take a look...

Why are Prices Rising?

These days it’s more difficult than ever to get decent business energy deals, but why is this? Why are business energy providers raising their prices so much? There are a number of reasons -

• The demand for energy in the post-lockdown period in Asia has soared. Asia provides gas to a big chunk of Europe, but because they need to refill their gas stores ahead of the colder months, there’s a conflict in demand
• The UK bristled against really cold winter months in 2020 and 2021 and this meant that much of the national gas stores were drained
• Ofgem has increased the energy price cap
• Wind turbines that should have been generating power were left idle thanks to the UK enjoying a summer where the wind barely blew
• There have been complications with Nord Stream 2 – a natural gas pipeline that would have ensured gas supplies could be delivered directly from Russia to Germany. However, since the Russia/Ukraine war, Germany has now halted the project
• A major power cable that delivers electricity from France was shut down due to a fire

All of these factors have led to energy savings being hard to come by, as even the best business energy suppliers have been forced to pass on cost increases that they have been dealt. You will have noticed your rising energy bills, but did you know that your energy bill is made up of approximately 40% of wholesale energy costs?

My Business Energy Supplier UK went Bust – now what?

If you’re running a business and you’re concerned that one day you’re going to wake up to zero electricity and no gas supply if your business energy supplier has gone / or is about to go bust, then fear not. Thankfully, this is where Ofgem steps into help out. If your business electric and business gas supplier has ceased operating, then Ofgem will swiftly and seamlessly transfer you to a different provider. There will be no interruption with your energy supply and your business will be able to continue to function as normal. This process is called ‘The Ofgem Safety Net’.

If, for whatever reason, you’re unhappy with the provider that Ofgem switches you to, then you are entirely within your rights to change supplier should you so wish.

I had loads of Credit with my old Energy Supplier – will it be Transferred?

This is the tricky bit when it comes to switching your business energy supplier. If you have a large credit balance when your business energy supplier goes bust, Ofgem will do its best to ensure you are switched to a new provider who will be able to give back that credit balance. However, it’s not always possible – you may be lucky and get a full refund, you may get a partial refund, or you may not receive any of it back.

If the latter happens and you want to chase your credit, then you will need to contact the administrators dealing with your old business utility accounts. You will need to make them aware of the situation, provide certain documents, and register yourself as a creditor. This can be a lengthy process and you may have to wait around 12 months to receive a refund – and even after this time, you still might not get it all back.

What Can I do?

If you’re worried about the stability of your current commercial energy suppliers, and have seen your business utility rates soar in recent months, now might be the time to take matters into your own hands. At Save on Bills, we can help you source the best energy suppliers for business so that you can compare business gas and electric rates and see about switching to a better deal. We could be able to ensure you are switched to a cheaper fixed business tariff, so that you’ll benefit immediately from reduced bills. Get in touch with the team at Save on Bills today and we’ll get your business energy rates comparison sorted, so that you can stop worrying and are able to focus on other aspects of your business.