What to do if your energy supplier goes bust
Since the energy price cap became law on 19th July 2018, a number of suppliers have collapsed. When Solarplicity went under, Ofgem appointed EDF Energy as the ‘supplier of last resort’ (SoLR) who would take on Solarplicity’s 8,000 customer accounts.
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This process has been repeated since then, with Ofgem always selecting a new SoLR to take on customers.
It can be stressful to hear that your energy supplier has collapsed, but you need not be worried if this happens to you.
Thanks to Ofgem’s ‘safety net’, not only will your energy supply continue without any disruption, but the entire switching process will be handled by your new supplier.
Furthermore, your new tariff from your new supplier doesn’t come with exit fees. This means that if you’re not happy with your new tariff then you can compare energy deals, and then switch suppliers without incurring any penalties.
Our FAQ section below addresses common questions that customers often have when their supplier collapses, and the answers are in line with the safety net guidelines.
Do you need to worry about what would happen to you if your supplier went bust?
In short - no. No matter what supplier you choose, your ability to access energy is safe. Your lights and heating will still work, regardless of your supplier’s business concerns.
But for a boost of extra confidence, you can select a supplier with top-rated service, or even a major household name, and still find a great price.
Could my bills go up after I am switched to a new supplier?
Unfortunately, yes. However, you could potentially bring them back down again.
The new supplier you are placed with may not be able to offer you the same rate that the old supplier did.
The old tariff you were on (and any contracts connected to it) will no longer exist should your supplier go bust.
Instead, your new supplier will give you a ‘deemed’ contract – meaning one you haven’t chosen. The bad news is that these contracts can be more expensive. The good news is that you can exit them at any time without penalty.
FAQs
What will happen to my current energy supply?
Your current supply won’t be interrupted in any way, so you can rest assured that your household energy needs will be met.
The only thing that will be changed is your supplier, who will endeavour to inform you of the change as soon as possible.
Who will be my new supplier?
Ofgem will appoint and announce the new supplier within a few days of your previous supplier going into administration. This new supplier is known as the ‘supplier of last resort’ (SoLR).
This is decided by way of putting out a tender; the winning supplier will have to meet particular requirements to ensure that they can support a new customer base quickly without disrupting their current one.
Will my tariff change?
Yes, your new supplier will try its best to match the tariff from your previous supplier. This is known as a ‘deemed tariff’. This is a tariff that your new supplier has deemed suitable for your household.
Your supplier will contact you as soon as possible to inform you about your new tariff and to confirm that the switch has been completed successfully. At this point, you can request a different tariff from your supplier, or you can shop around for a new energy deal.
Don’t worry, you won’t be charged any exit fees, as this is a requirement that is enforced by Ofgem’s safety net.
Does this mean the energy bill go up?
Deemed tariffs do not guarantee a reasonably priced unit rate. Suppliers who absorb customers from collapsed energy firms are taking on a certain degree of risk, and also have to purchase more wholesale energy at short notice to accommodate the influx of new customers. Usually, your energy bill will remain unchanged until the end of your contract.
Will I receive my outstanding credit?
Absolutely; your new supplier will pay you the full amount of credit that you accrued from your previous supplier.
Your new supplier will contact you in due course to explain how the credit will be paid to you.
What about my debt?
This is dependent on the agreement made between the administrators of your former supplier and your new supplier.
Either way, you will have to pay off your outstanding debt, whether it’s to your previous supplier or your new supplier.
What will happen to my smart meter?
This is dependent on your new supplier and the type of smart meter you own.
Your new supplier will inform you whether or not they are able to operate your meter in ‘smart mode’. Otherwise, your smart meter will operate in analogue mode instead. This means you will have to continue taking manual readings.
However, the network that operates Britain’s smart meter network, the Data and Communications Company (DCC), is currently in the process of migrating first-generation smart meters, the SMETS1, onto the network.
If you have an SMETS2 smart meter, then it will be able to remain in smart mode with your new supplier.
Is there anything I need to do?
Make sure you take a meter reading as soon as possible to see how much energy you have used with your previous supplier; this will ensure that you are accurately billed.
Once your new supplier has been confirmed, they will request your energy readings so you should have this information on hand.
