GB Energy Collapse & Energy Prices Rising

On 26th November small electricity and gas supplier ceased trading.

  • What does this mean for GB energy customers?
  • Are gas and electricity prices going up?
  • Should I avoid small energy suppliers?

What To Do If You Are A GB Energy Customer

  • Don’t Panic!

Firstly take an energy reading as soon as possible – if possible take a photo of your meter so you have a physical record.

Ofgem, the energy regulator, will ensure that you will continue to receive electricity and gas as normal.  Ofgen also say that any credit you have on your account will also be honoured.

First Ofgem will appoint a new company to take over your account including any credit you may have.  In all likelihood your tariff will be more expensive as GB energy mostly had fairly cheap tariffs AND tariffs have got about 10% more expensive in recent months so no one will take over your supply at rates that were available earlier this year.

“If you are a GB Energy customer there is no need to worry as we will ensure your energy supplies are safe. Ofgem is 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. In any competitive market companies will fail, this is why we have procedures in place to ensure customers’ energy supplies are always secure.” (Rachel Fletcher, Ofgem senior partner for consumers and competition)

Once you have been moved to a new supplier by Ofgem, check whether there are better deals (We think there probably will be!).  You will be able to check your tariff on our switching engine.

Our next collective will probably be February 2017 (our current winter collective will be finished by then) – however, if your deal is not great, it will probably be best for you to switch again AFTER  you have been moved to a new supplier by Ofgem.

More on GB Energy ceasing trading

Instructions from Ofgem

BBC News story

Are gas and electricity prices going up?

Yes!

Over the past year many of the best deals have been withdrawn and for an average gas and electricity user (12500 kWH Gas, 3100 kWh electricity per year) the cheapest tariffs are now about 10% more expensive.  Standard variable Tariffs (the rip-off tariffs suppliers move you onto if you don’t switch) have gone up even more.

In any event the way our gas and electricity market works is that once a cheap fixed deal expires, companies place you on a more expensive “Standard Variable Tariff”.  These are nearly always much more expensive than the cheapest available deal.

So, unfortunately, the best way to save on your energy bills is:

  • to switch to a cheap tariff
  • then switch again when it finishes.

Our current collective switch offer from EDF is the cheapest option for an average user in most of the UK for a 1 year fixed deal.  It is scheduled to be withdrawn at midnight on 29/11/2016

– you can see how it compares for you – Switch Now

We  warned about energy price rises in June 2016 and in many of our emails.  Sign Up to get our offers.

Should I Avoid Small Energy Suppliers?

This is a really tough question right now as there are lots of newish small suppliers, and for some this will be the first time they will have to negotiate buying energy for you when prices are rising.  If they get things wrong, like GB energy did, they will have problems (GB energy blamed rising prices for their financial meltdown).

Note: The small suppliers have consistently offered many of the best deals for the past few years, with the Big Six suppliers using things like our collective switches to offer competitive deals to a few customers, so they don’t lose all their customers. (Most of our collective winners have been Big Six suppliers,as they have made the best offers to us).

Ofgem guarantees your energy supply so you will not be cut off if your supplier goes bust.  However we don’t know how competitive the tariff Ofgem switches customers to will be.

Personally I chose a small supplier …. and have done so for many years.   Without lots of small suppliers there will be fewer good tariffs to choose from.  Many small suppliers also have excellent customer service.  However respected analysts suspect that there may be other small suppliers facing problems if energy prices keep rising or become very volatile.

We have often encouraged people to switch to small suppliers as we believe the Big Six (Who are the Big Six) were abusing their dominance of the UK market.  Without small suppliers we think they will do so again. Provided Ofgem look after GB Energy customers as they are mandated to do, we will continue to think that small suppliers benefit UK consumers.

However, in short – we don’t know if any other small (or big) suppliers are facing severe financial problems.  Sorry!

 

 

 

Categories: Cheapest energy and Uncategorized.