Big six supplier EDF was shown as being in credit default with code administrators Elexon in the early hours of Saturday morning (31 August).
EDF has since confirmed that the default was caused by an “administrative issue”.
A spokesperson said: “Due to an administrative issue, it was announced that EDF Energy Customers entered credit default on 31 August.
“Elexon has since resolved this and confirmed that we are no longer deemed to be in credit default.”
A spokesperson for Elexon confirmed to Utility Week the issue had since been resolved.
Responding the news Ian Barker, managing partner at BFY Consulting, said: “EDF isn’t the London based energy supplier you imagine going into Elexon credit default at 2am on a Saturday morning – it’s highly unusual for this to happen to one of the larger suppliers.”
Barker added that more small suppliers are aware of the scrutiny placed on Elexon credit defaults meaning these are typically one of the first bills to be paid in the event a supplier is struggling – as this avoids a public signal they are suffering from a lack of cash flow liquidity.
“Other creditors however are getting squeezed, and they often have limited sight of the risk they are exposed to”, he added.
Parties trading on the balancing mechanism are required to post sufficient collateral to cover their outstanding payments in case they cease trading.
Elexon, as the administrator of the balancing and settlement code, will issue a warning if the amount owed exceeds a certain percentage of their credit cover.
EDF was shown to be in level 2 default indicating the supplier’s outstanding charges amount to more than 90 per cent of its credit cover.
Meanwhile a level 1 default occurs when a supplier’s outstanding charges amount to more than 75 per cent of its cover.