Eversmart Energy has today (6 September) become the sixth supplier of 2019 to cease trading, Ofgem has announced.
In a statement the regulator said the Manchester-based energy retailer has entered the supplier of last resort (SoLR) process where its 29,000 domestic customers and a small number of business customers will be found a new provider.
Yesterday, Utility Week revealed that Eversmart had a winding up order issued against it by National Grid.
The petition is scheduled to be heard at the High Court on 16 September.
Meanwhile the Energy Ombudsman has revealed that it has received four times as many complaints about the supplier this year than it did for the whole of 2018.
Matthew Vickers, chief executive at the Energy Ombudsman, said: “We have seen a significant increase in complaints about Eversmart Energy, receiving four times as many complaints so far this year (225) as we did in the whole of last year (55). Billing and switching problems have been the main drivers of unresolved complaints about the company.
“If you have complained to us about Eversmart and are awaiting a case investigation, decision or remedy we will contact you with an update soon. It’s unlikely that we will be able to take any further action on your complaint.
“In addition, as of today we cannot investigate any new complaints about Eversmart. We appreciate that this will be disappointing and frustrating for affected customers.
“As a not-for-profit ombudsman, we are funded by the case fees that energy companies pay to have complaints reviewed.
“In common with many other failed suppliers, Eversmart has ceased trading owing us a significant amount of money in unpaid case fees, increasing our exposure to bad debt.”
Gillian Guy, chief executive of Citizens Advice, said: “Eversmart is the 13th domestic energy company to collapse in the last two years. Our research shows this unlucky baker’s dozen of failed companies has left behind at least £172 million in unpaid costs. These will be picked up by other consumers through higher bills.
“We’re also concerned that some customers may have high credit balances.
“Eversmart had a tariff which encouraged people to pay for a year’s energy upfront. We raised our concerns with Ofgem, and it’s since been withdrawn.
“When a supplier goes bust, customer credit balances are protected. But all of us will eventually pay for honouring them through increased bills.
“These regulations provide vital protection for those affected. However, it was never expected that firms would actively encourage very large credit balances.
“Ofgem needs to act to reduce the cost of supplier failures and protect customers.”
The challenger energy brand was one of several suppliers which failed to pay its renewables obligation (RO) payments by the late payment deadline last year. It owed £367,149.82 and was ordered to pay in instalments by 31 March this year.
Speaking in April Eversmart’s chief executive Barney Cook said the company had by then paid its obligation in full.
In an interview with Utility Week in November last year Cook insisted Eversmart had a handle on its risks.
“We recognise our risks and we recognise how we can be sustainable. Although we have seen growth in certain months it doesn’t mean we are growing at an accelerated rate every month, so we are very measured in how many customers we take on. A big driver in our customer acquisition is our smart meter rollout.”
In total 34 suppliers failed to meet their obligation by the initial 1 September 2018 deadline. Of those, 20 fully discharged their obligation by the late payment deadline at the end of October.
In November, the regulator announced a mutualisation process would be triggered for the first time ever after the outstanding payments following the final deadline exceeded a threshold known as the relevant shortfall.
The level of the shortfall was confirmed at £58.6 million.
A number of suppliers named as owing RO payments beyond the 31 October late payment deadline have ceased trading.
Tough trading conditions have already seen five other suppliers exit the market this year – Economy Energy, Our Power, Brilliant Energy, Cardiff Energy Supply. and Solarplicity.