Industry in turmoil as second supplier this week goes bust
Spark Energy announces it has ceased trading
Spark Energy announced today that it has ceased trading, making it the seventh supplier to go out of business this year and the second one this week. This news comes days after Extra Energy also went into administration.
The Press Association understands that KMPG were brought in to oversee a merger or accelerated sale that Spark Energy were considering. However, since the collapse of Extra Energy and other pressures in the industry, potential investors backed out.
Spark Energy's 290,000 customers have been advised by Ofgem to take a new meter reading and not to switch, but to sit tight instead. Ofgem will enter into a bidding process and use the bargaining power of 290,000 potential customers to negotiate a deal with a new supplier. Taking a new meter reading will ease the transfer to the new supplier.
Ofgem's executive director Mary Starks has said: "Our message to energy customers with Spark is there is no need to worry, as under our safety net we will make sure your energy supplies are secure and your credit balance is protected. Although we have seen a number of supplier failures this year, our safety net procedures are working as they should to protect customers."
Mark Todd, co-founder of energyhelpline has commented, "Spark Energy customers should stay calm. Your energy supply is safe and won't stop. Once your new supplier and deal is announced by the regulator, do a price comparison and switch if you can save.
"You would be best to get a fixed rate tariff if you switch as prices are on the rise. Fixed tariffs guarantee no price rises enabling you to avoid more nasty surprises. Typically, customers can save £200 a year by switching. This figure tends to be higher going to a small supplier and lower to a big one. Grab a recent bill, pop your details in to the site and it will compare prices for you across loads of suppliers. Once submitted, an energy switch takes about 2-3 weeks to go live."