The Energy Crisis II

by Luke Betts

The dreaded news we were all expecting arrived recently - Energy bills will increase again by a whopping average of over £700 a year effective as of April 2022, affecting more than 22 million people. Specifically, the 18 million households on standard tariffs will see an average increase of £693; whilst the bills of 4.5 million customers with prepayment meters will averagely increase by £708.

Since our last blog regarding the energy crisis back in early October, many more energy firms have since gone bust. Here’s the latest companies which have ceased trading, along with the companies who have taken over their supply:

·       Colorado Energy (Oct 2021) – New Supplier: Shell Energy
·       Pure Planet (Oct 2021) – New Supplier: Shell Energy
·       Daligas (Oct 2021) – New Supplier: Shell Energy
·       GOTO Energy (Oct 2021) – New Supplier: Shell Energy
·       Bluegreen Energy (Nov 2021) – New Supplier: British Gas
·       Ampower (Nov 2021) – New Supplier: Yu Energy
·       Zebra Power (Nov 2021) – New Supplier: British Gas
·       Omni Energy (Nov 2021) – New Supplier: Utilita
·       Neon Reef (Nov 2021) – New Supplier: British Gas
·       Orbit Energy (Nov 2021) – New Supplier: Scottish Power
·       Entice Energy (Nov 2021) – New Supplier: Scottish Power
·       Zog Energy (Dec 2021) – New Supplier: EDF
·       Together Energy (Jan 2022) – New Supplier: British Gas

One of the biggest energy firms affected by the crisis hasn’t actually been included in this list. Bulb Energy were placed into ‘Special Administration’ back in November 2021, sparking concern for their 1.7 million customers across the UK. However due to its size, Bulb isn’t simply ceasing to trade and having their customers moved to a different provider. Instead this process sees Bulb continue its supply and services to customers as normal, but the business is run by the Government through the regulator Ofgem. This means that their customers remain unaffected, apart from being £700 lighter in a few months…

This second round of price hikes during this crisis marks an eye-watering 54% rise in the energy price cap on top of the 12% increase from August 2021, something which is sure to leave many people wondering how they are going to afford this in the immediate and for the foreseeable future. But the Treasury have attempted to soften the blow on lesser income households by offering a one-time £200 energy discount for October 2022, which would have to be paid back anyway over the next 5 years. So is this really helping anyone?

Jonathan Brearley, Chief Executive of Ofgem had this to say in their press release on the prospect of significant fuel poverty:

“We know this rise will be extremely worrying for many people, especially those who are struggling to make ends meet, and Ofgem will ensure energy companies support their customers in any way they can.

The energy market has faced a huge challenge due to the unprecedented increase in global gas prices, a once in a 30-year event, and Ofgem’s role as energy regulator is to ensure that, under the price cap, energy companies can only charge a fair price based on the true cost of supplying electricity and gas. 

Ofgem is working to stabilise the market and over the longer term to diversify our sources of energy which will help protect customers from similar price shocks in the future.”

For extra information this subject, please give Citizen’s Advice a call on 0808 223 1133

Or if you’re struggling to pay, there’s a new scheme designed to give households time to receive debt advice and find a solution to sort out their debt problems - Breathing space. The scheme will last for 60 days as long as applicants remain eligible during which time all creditors who have been included will be informed and must stop any collection or enforcement activity. Just give the National Debtline a call on 0808 808 4000 to hear more and sign-up.