Home » Prices soar as two other UK energy companies fail

Prices soar as two other UK energy companies fail

by Lester Blair
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Amid rising energy wholesale prices, two more UK energy businesses have closed their doors.

Pure Planet is backed in part by the oil giant BP and Colorado Energy. They join a host of other small energy companies that went bust.

Pure Planet claimed it was trapped between rising costs, and the UK’s energy price cap which caps what companies can charge their customers.

According to it, this made the business unsustainable.

Both companies’ customers will move to new suppliers.

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The latest victims of the global rise in gas prices are Pure Planet and Colorado Energy.

Pure Planet supplies natural gas and electric to more than 235,000 domestic users, while Colorado Energy provides gas and electrical to roughly 15,000 domestic customers.

Ofgem, the energy regulator will find a new supplier. The customers are asked not to move until that happens.

Today’s development brings the total number of UK energy company failures affecting customers to approximately two million.

Ofgem announced Wednesday that global gas prices have risen at an unprecedented rate in the past weeks, putting pressure on suppliers.

Neil Lawrence (Director of Retail at Ofgem) stated, “Ofgem’s Number One Priority is to Protect Customers.”

We know that it is worrying for many, and we understand the distress caused by news reports about suppliers going out of business.

I want to assure affected customers that there is no need for them to be worried: we have a safety net to ensure your energy supply continues.

Lawrence stated that customers with credit are entitled to funds protection, which means that the customers won’t be charged any interest if they have money.

Pure Planet stated that Ofgem and the government expect them to “sell energy for a much lower price than what it costs to purchase currently”.

The statement stated, “This is not sustainable, therefore, we have to make the difficult choice to cease trading.”

Pure Planet released a separate statement, “In our case despite being hedged till next spring and having received the backing by BP,” Pure Planet explained.

“Sadly, this caused BP to decide to withhold its support. We are now unable to continue.”

BP claimed it worked hard to support Pure Planet, including financial assistance through wholesale supplies and other funding arrangements.

A spokesperson for BP said that “But, despite extensive work over a long period of time, it was no longer economically viable for BP. We took this difficult decision.”

Nine of nine suppliers were forced to close in September. However, Kwasi Kwarteng (business and energy minister) has said that he will not support struggling companies. He said last week that more companies might collapse.

Source: BBC.com

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