Will my gas and electricity be switched off?
While it is undoubtedly an inconvenience to customers when their energy company ceases trading, you can rest assured that the market regulator Ofgem has a safety net in place to ensure that your gas or electricity would not be shut off if this happened to you. In fact, you shouldn’t really feel any disruption at all.
How will I be contacted if my energy supplier goes bust?
If your energy supplier goes out of business, Ofgem will appoint another energy company to take over the supply of gas or electricity to your business. They do this by inviting other energy providers to bid to become the new supplier. This process is designed so that customers should get the most competitive deals and usually only takes a matter of days.
Once your new gas or electricity provider has been appointed, they will get in touch with you and let you know the tariff you are on.
Is it safe to go with a smaller energy supplier?
Whether you go with one of the Big Six or a smaller energy company for your business gas and electricity, you’ll find there are pros and cons.
On the plus side, some of the smaller energy firms offer the cheapest deals, which can be very enticing for business customers who are looking to save every penny. They are also often very well regarded when it comes to customer service. And if you’re looking for a green energy deal, you may also find that some of the smaller companies are most competitive in this arena.
However, seven out of 10 UK customers are with one of the Big Six for their energy supply. This could be put down to the fact that people feel safer with bigger companies that are more familiar to them and are worried about smaller companies going out of business.
As we’ve previously mentioned though, if your energy provider does go bust, you’ll likely feel very little disruption so you might decide that it is worth the risk if you can get a cheap deal.
What happens to my credit if the energy supplier goes bust?
Under Ofgem’s regulations, domestic energy customer’s credit is protected and will be paid back to them by their new supplier once they are appointed. After Ofgem assigns a new supplier, they will get in touch with domestic customers to let them know this will work. If they have used energy that they have yet to be billed for, the cost of this energy will be taken from their account balances.
However, this isn’t the case for commercial energy customers. It’s important to note that business credit is not protected under Ofgem’s Safety Net. The best course of action for business customers to take is to get in touch with their old supplier’s administrator to find out what will happen to their credit.
Will I need to cancel payments/direct debits?
This is not necessary as your new supplier will inform you of how the transfer from the old supplier to them will happen and explain how any direct debit arrangements will work. However, if you cancel your direct debit with your old supplier before your new supplier gets in touch, that’s okay. There’s no harm in cancelling your direct debit as you will always be able to set up a new arrangement with your new supplier.
Will I need to find a new energy supplier?
As discussed previously, if your energy supplier stops trading, you won’t be left high and dry. Ofgem will ensure that another energy company takes on the customers of the failed provider so you will automatically be switched to a new supplier.
However, it’s worth stressing that you will no longer be on your old tariff. Instead, your new supplier will put you on a ‘deemed contract’. A deemed contract is one that you haven’t chosen. While the Ofgem process is designed to ensure you receive a competitive solution, as soon as your new energy company gets in touch with you, you should request to be moved to their best value tariff. Alternatively, you can start shopping around for better deals.
How to switch suppliers if your energy supplier goes bust
If your supplier goes bust, it’s best not to switch until a new provider is appointed. Ofgem advises that you simply sit tight until the new provider has taken over to make the process as seamless as possible.
When a new supplier is appointed however, it’s likely that the deemed contract they put you on will not offer the best value for money you can get. Due to this, it’s a good idea to compare what they can offer you against other deals on the market.
If you decide to switch to another supplier, you should inform the appointed company of your intention to change providers as soon as possible and tell them when you want them to stop supplying energy to you. You’ll be pleased to know that you won’t have to pay any exit fees in this scenario.
Once you’ve let the company know that you’re terminating your contract, you can sign a new agreement with your chosen supplier and arrange a date for them to take over the supply of gas or electricity to your business premises.
While the thought of your energy company becoming insolvent may fill you with apprehension, thanks to Ofgem’s regulations and procedures, the operation of your business should not be impacted. You don’t strictly need to do anything when Ofgem appoints a new provider. However, comparing the tariff you’ve been put on with other deals on the market may well be worth the inconvenience of extra admin.
Let Utility Bidder handle it
We’ve helped thousands of business customers to find the best energy contract for them and we’d love to help you too. If you’ve been placed on a deemed contract by a new supplier or you simply want to know if you can get better value for your money on your business gas and electricity, we can help. With Utility Bidder, you can compare over 27 energy suppliers all in one place, which could save you a lot of time and money.