Two million households have faced a chaotic change in energy supplier due to the collapse of nearly two dozen firms during the gas crisis.
Since August, 2,076,800 domestic customers and 58,300 non-domestic customers have seen their energy supplier collapse as 22 firms ceased trading, according to i analysis of Ofgem figures.
Customers of failed firms face being switched to a different supplier picked by the regulator Ofgem. For many, this has meant an increase in gas and electricity bills, while others have been left hanging for weeks waiting to be contacted.
Ian Preston of the Centre for Sustainable Energy told i: “We’re not surprised by this new analysis revealing how widespread the issue is around collapsing energy suppliers.
“Our advice line has seen thousands of households reaching out for support because they’re worried about their energy supplier going bust, horrified at deals they are being offered and not being able to find a better price.”
Customers of several collapsed small firms that billed themselves on their eco-credentials, like Pure Planet and Green, have been moved against their will to Shell Energy – a subsidiary of the multinational oil giant.
A total of 536,000 domestic customers were hoovered up by Shell from five different companies, nearly all of whom touted their green or sustainable credentials. Shell Energy insists the electricity it provides is “100 per cent renewable” and “low-carbon”.
British Gas has taken on 459,700 customers from five failed firms, while E.ON Next took on 239,000 from four.
While customers are free to move on from the assigned “supplier of last resort” without exit fees, price comparison experts have warned that switching in the current market is likely to lead to even higher bills.
The collapse of the firms was caused by the surge in wholesale gas prices earlier this year, with an energy price cap protecting domestic consumers from bill increases leaving firms drowning in debt as they are unable to pass on rising costs.
David Duckworth, founder of Rowan Energy, explained: “Businesses that run at a loss cannot do so for long periods. Unless the government and regulators can come up with a solution to UK gas supply issues, we are going to see more and more of these smaller companies go under, taking away the competitive and fair energy market, ultimately resulting in increased energy bills.”
Tuesday saw the collapse of two further firms, Neon Reef and Social Energy.
Experts previously warned that the collapse of multiple firms could create a “scammer’s paradise”, with millions of customers simply told to wait until a new supplier gets in touch – creating fertile ground for scammers posing as their current energy provider or new firms trying to lure them in.
Simon Francis, co-ordinator of the End Fuel Poverty Coalition, told i: “Any collapse of an energy supplier reduces the choice consumers have and leaves the public in the hands of an ever-decreasing band of companies to pick from. With less competition and less ability for consumers to switch, energy prices will rise and fuel poverty numbers will increase.
“The current system is broken and the government needs to provide far more support for people facing fuel poverty this winter.”
Campaigners have also warned of issues for people on low incomes, who are disproportionately likely to be on old prepayment meters that can cause issues during switch-overs.
Peter Smith of National Energy Action told i: “Issues can arise over compatibility with their new supplier’s top-up card, risking them losing supply. Four in 10 claimants of Universal Credit are on prepayment meters so some of the most vulnerable could be affected by this issue.
“We also have concerns over those who are on debt repayment plans and whether these are carried over to the new supplier. We want Ofgem to ensure vulnerable consumers aren’t put at risk when their supplier fails and provide deeper protection for low-income consumers.”
An Ofgem spokesperson said: “We know this is a worrying time for many people. The energy price cap covers around 15 million households and will ensure that consumers don’t pay more than is absolutely necessary this winter. Any customer worried about paying their energy bill should contact their supplier to access the range of support available.
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