Entice, Orbit and other energy businesses go bankrupt

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Ofgem reports that another two energy suppliers went bust in the wake of the spike in gas prices.

On Wednesday, Entice Energy and Orbit Energy, who have approximately 5,400 and 65,000 clients, stopped trading.

These two companies are among the most recent to fall as suppliers have failed to deliver on their price promises to customers due to higher wholesale gasoline prices.

Ofgem announced that it would find new suppliers for its customers.

The advice to households is wait until the new supplier has been appointed before switching.

Neil Lawrence, director of retail at Ofgem, said:  ”I want to reassure affected customers that they do not need to worry:  under our safety net we’ll make sure your energy supplies continue. ”

Orbit claimed that its energy supplies were secure and stated any outstanding credit would be honored.

  • What should I do in the event that my energy supplier fails?

The collapse of Orbit and Entice comes after Bulb, the UK’s seventh largest energy supplier, was handed about £1,000 per customer from the UK government to enable it to continue supplying energy.

Bulb, which has 1.7 million customers, is the largest company to date to face difficulties in recent months and was put into special administration, which will allow it keep trading for the moment with a £1.7bn loan.

It will continue to be managed by the administrator until there is a buyer or customers are moved.

Bulb’s large size has allowed it to stay afloat, and not have its customers transferred to other suppliers as was the case with other energy companies.

‘Dominoes’

After a rise in gas prices, 24 of the country’s energy suppliers have failed since September 1st.

Gillian Cooper from Citizens Advice, Head of Energy Policy, stated that suppliers are continuing to drop like dominoes and it is clear that the market isn’t functioning as it should.

Some businesses were forced to lower the price of energy due to rising wholesale gasoline prices.

Bigger corporations tend to order gas earlier in the year, which can help them prevent large price rises. But smaller companies are often less capable and therefore have been under greater pressure.

Orbit customers and Entice customers, will change to Ofgem’s current tariff. They will also be contacted their new supplier.

People have been advised by the regulator to read their meters and wait for a new supplier to be appointed before switching to another energy company.

Ofgem claims that consumers are also protected by the energy pricing cap. This limits what firms can charge per gas unit once they switch to a different tariff.

What happens to your energy supplier if it goes under?

  • Even though the supplier ceases to exist, gas or electricity will be delivered to customers. Although Ofgem may move your account to another supplier within a few weeks, it could take some time. You will be contacted by your new supplier to discuss what is going on with your account.
  • You can check your balance while you wait for your supplier to contact you. If possible, download your bills. Take a picture of the meters reading.
  • Citizens Advice states that direct debit payments are fine and can be cancelled at any time. Before you can cancel, wait until the new account has been set up.
  • Credit protects your money and will be reimbursed. If your debts were to an old supplier, the money will be returned to you.

Find out more about next steps.

Source: BBC.com

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