In the face of rising wholesale energy prices, two more UK energy companies have gone out of business
Pure Planet, which is sponsored by BP, and Colorado Energy are among a handful of tiny energy companies that have lately gone bankrupt.
Pure Planet claimed it was trapped between growing expenses and the UK’s energy price ceiling, which restricts how much firms can charge customers.
- It said that as a result, its company had become “unsustainable”
- Both firms’ customers will be transferred to new suppliers
What options do I have if my energy provider goes bankrupt?
1.5 million consumers are affected by the bankruptcy of energy companies. Pure Planet and Colorado Energy are the most recent victims of a global gas price surge.
Pure Planet serves around 235,000 domestic consumers with gas and electricity, whereas Colorado Energy serves approximately 15,000 domestic customers. Customers are being advised to do nothing until the transfer takes place in the coming weeks by energy regulator Ofgem. Pure Planet and Colorado Energy’s downfall brings the total number of customers affected by the current wave of energy business failures in the UK to roughly two million.
“The safety of customers is Ofgem’s first responsibility,” said Neil Lawrence, director of retail at Ofgem.”I want to reassure impacted consumers that they don’t have to be concerned: under our safety net, we’ll ensure that your energy supplies are maintained.”
Mr Lawrence went on to say that if clients have credit, their monies are safeguarded, ensuring that they do not lose money owing to them. The government and Ofgem want Pure Planet to “sell electricity at a price substantially cheaper than it now costs to acquire,” according to Pure Planet. “This is unsustainable, and as a result, we’ve had to make the tough choice to stop trading,” the statement added.
“Despite being hedged until next spring and having BP’s support, Pure Planet faced growing risks and huge potential losses by continuing to operate in this market,” the company stated.
“Unfortunately, this resulted in BP withdrawing their assistance, and we are no longer able to continue.” BP stated that it had worked hard to help Pure Planet and had provided financial assistance through wholesale supplies and other finance agreements. “However, despite extensive effort over a long period of time, we have come to the conclusion that it is no longer financially feasible for BP to maintain this partnership and have made this painful decision,” a BP spokeswoman said.
A price ceiling
Nine providers went bankrupt in September, but Kwasi Kwarteng, the minister of business and energy, has said he will not help ailing energy companies. He predicted that more businesses will fail last week.
Consumers on default tariffs are protected by the regulator’s price cap, which covers 15 million households in England, Wales, and Scotland. It limits costs such as how much customers pay per unit of energy.
However, because of the restriction, suppliers claim they are unable to pass on increased wholesale gas prices to customers.
Avro Energy, People’s Energy, and Green Supplier Limited are just a few of the suppliers who have lately gone bankrupt.
The impact of rising costs has been felt across the supply chain.
CNG, a gas transport company, has written to its energy provider clients, stating that it would no longer service the wholesale market, according to BBC Newsnight on Wednesday evening.