Around 300 customers ‘slipped through Ofgem’s safety net’

Around 300 customers of defaulting energy providers have effectively slipped through Ofgem’s safety net after the supplier of last resort (SoLR) process was not invoked.

Industry sources told Utility Week they had identified the “supplier-less” customers of companies which ceased trading but for whom the SoLR process was never invoked due to arrangements being made by the original supplier and the regulator.

According to the sources the suppliers agreed to transfer their customers to a new supplier but not all were transferred.

Utility Week understands the suppliers in question are Electraphase, Snowdrop Energy and URE Energy.

Circulars produced last year by code administrator Elexon show these companies were in default of the Balancing and Settlement Code (BSC).

URE Energy, which is under investigation by Ofgem after failing to pay its Renewables Obligation (RO) payments on time, was found to be in default on 28 November 2018. Meanwhile Snowdrop was found to be in default on 19 October and Electraphase on 9 August last year.

Snowdrop announced it was transferring all its customers to fellow Sheffield-based Nabuh Energy in October last year.

In August 2018 Utility Week reported that SSE was thought to have contacted almost 13,000 customers and urged them to switch to Electraphase, which was believed to be struggling to pay its debts.

Big six providers were asked by Ofgem to list cheaper alternatives for customers on the poorest value default tariffs as part of its switching initiative.

While Ofgem would not confirm which suppliers are connected to the unaccounted for customers, it has confirmed to Utility Week that the outstanding transfers are “now being progressed”.

A spokesperson said: “All of these customers are on supply and will continue to be on supply.

“Our current understanding is that the outstanding customer transfers are now being progressed and we’re actively working with key industry stakeholders to ensure that no customers have been overlooked.

“We have been given assurances that the final customers will be transferred over in the coming weeks.”

While there appeared to be confusion over how these customers will be billed the industry regulator added that, subject to the particular arrangements, customers will be billed either by the supplier they will be transferred to or the outgoing supplier/ an administrator.

The spokesperson added: “We have stressed the urgency of getting these remaining customer transfer issues resolved immediately.

“We have been working closely with the suppliers in question (and wider industry stakeholders) to ensure the relevant suppliers transfer the customers as a matter of priority.”

A statement regarding Ofgem’s safety net on its website assures customers that it is “unlikely” a supplier will go out of business.

It added: “If it does, Ofgem’s safety net will make sure you’ll always have an energy supply, and will feel as little change as possible.”

Since January last year a total of 13 suppliers have exited the market.

As well as Our Power, which ceased trading at the end of last month, these include: