GB Energy Supply, a budget energy firm with 160,000 customers, has ceased trading, blaming recent rises in energy prices.
Ofgem, the government regulator for gas and electricity markets, says that it will appoint a new supplier and stresses that customers’ outstanding credit balances are protected.
The regulator unveiled a “safety net” just last month to protect consumers’ credit balances if they have paid for energy in advance.
In a statement on the provider’s website, Luke Watson, managing director of GB Energy Supply says: “Due to swift and significant increases in energy prices over recent months and, as a small supplier our inability to forward buy energy to allow us to access the best possible wholesale prices, means that the position of the business has become untenable and as such we will now be entering a process overseen by Ofgem to move you to a new supplier.”
Wholesale gas and electricity prices have increased by 35% and 40% respectively this year.
A report from uSwitch.com, released last week, found that five of the big six energy suppliers have increased the price of their cheapest tariffs by an average of 16%, or £129 per year, since September.
Among the big six, E.ON has increased its cheapest fixed rate tariff the most since September – upping prices by an eye-watering 34% or £255, from £760 to £1,015 a year. SSE and ScottishPower follow closely behind, with hikes of 24% and 16% respectively on their cheapest fixed deals.
Emma Bush, uSwitch.com energy expert, says: “GB Energy Supply is the first domestic energy supplier to go out of business in a decade, but rising wholesale prices this year are making for some tough market conditions for new, independent suppliers in particular.
“Many of them have recently increased bills – including GB Energy Supply, which hiked prices by almost a third only last month.”
What should you do?
Don’t contact the GB Energy Supply call centre.
Ofgem advises GB Energy Supply’s customers to take a meter reading and wait until their new supplier contacts them to tell them what to do about any credit balances they might have with GB Energy Supply.
Once they’ve been contacted, customers should ask to be put on the cheapest deal or shop around for a cheaper supplier. You can find out which energy companies Moneywise readers rate highest for value for money and customer service in our Home Finance Awards 2016. Customers of GB Energy Supply won’t be charged exit fees for leaving.
Ofgem: “There is no need to worry"
Rachel Fletcher, Ofgem’s Senior Partner for Consumers and Competition, says: “In any competitive market companies will fail, this is why we have procedures in place to ensure customers’ energy supplies are always secure.
“If you are a customer of GB Energy Supply there is no need to worry as we will ensure your energy supplies are safe. Ofgem are actively working with the industry to ensure your transition to a new supplier is as smooth as possible. While this process is underway our advice is not to do anything as you can continue to rely on your energy supply as normal.”