250,000 customers to be assigned new energy suppliers as more companies go bust

Business

The demise of two more energy companies has been confirmed as the surge in wholesale gas costs this year drives up bills for providers and households alike.

Sky News had revealed on Tuesday that up to four suppliers were in talks with the regulator about entering its Supplier of Last Resort (SOLR) mechanism.

Pure Planet and Colorado Energy said they had ceased trading on Wednesday evening and Ofgem later confirmed their respective customer bases would be allocated a new supplier in the coming days.

BP-backed Pure Planet, which has 235,000 households on its books, ran into difficulty when the energy giant refused additional funding.

Colorado Energy had just 15,000 customers.

The regulator’s statement said: “Under Ofgem’s safety net, customers’ energy supply will continue and funds that domestic customers have paid into their accounts will be protected, where they are in credit.

“Domestic customers will also be protected by the energy price cap when being switched to a new supplier.

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“Customers of these suppliers will be contacted by their new supplier, which will be chosen by Ofgem.”

The demise of Pure Planet and Colorado means that 14 small suppliers have collapsed this year – 11 of them over the past six weeks.

They have been hurt by business models that expose them to near-term delivery contracts for raw energy which have shot up – by more than 500% at one stage this year – because of a range of pressures on supply Europe-wide.

They include gas storage shortages after a cold end to last winter and stiff competition from Asia to replenish stocks.

In the UK, poor weather conditions for wind generation have raised demand and a fire at a power interconnector with France in Kent last month are also contributory factors.

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