The independent supplier informed its 160,000 customers that the company has started a process “overseen by Ofgem” to move them to a new supplier, in a letter posted on its website.
“It is with regret that we are informing you that GB Energy Supply is no longer trading and therefore you will be unable to access our website at this time”, wrote managing director Luke Watson.
“Due to swift and significant increases in energy prices over recent months and, as a small supplier our inability to forward buy energy to allow us to access the best possible wholesale prices, means that the position of the business has become untenable and as such we will now be entering a process overseen by Ofgem to move you to a new supplier.”
Watson said their new supplier will contact them “soon” to provide information on the how the process will affect them and gave a link to the ‘safety net’ page of the Ofgem website. He urged customers not to contact their call centre to discuss the issue. “During this process, all customer contracts will be honoured, so please rest assured that your supply will not be affected,” he added.
Ofgem said in a statement: “Ofgem has existing procedures in place to ensure that their customers can have confidence that their energy supply will continue, and that domestic customer’s outstanding credit balances are protected.
“We’ll now take steps towards appointing a new supplier to take over the 160,000 customers who were with GB Energy Supply. Ofgem will run a process to choose the supplier which will best protect the interests of GB Energy Supply customers.”
The regulator advised customers to take a meter reading and then wait to hear from their new supplier about what to about any credit balances with GB Energy Supply. “Once they’ve been contacted, customers should ask to be put on the cheapest deal or shop around for a cheaper supplier”, it added. “They won’t be charged exit fees.”
Ofgem senior partner for consumers and competition Rachel Fletcher said: “In any competitive market companies will fail; this is why we have procedures in place to ensure customers’ energy supplies are always secure.
“If you are a customer of GB Energy Supply there is no need to worry as we will ensure your energy supplies are safe. Ofgem are 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. We will work to appoint a new supplier as soon as possible and they will be in touch with you.”
Energy UK chief executive Lawrence Slade commented: “Customers of GB Energy Supply can rest assured that they are covered by Ofgem consumer protections and that there are no risks to their energy supply. The regulator will appoint an existing energy firm to take over customers’ energy supply. Customers do not have to do anything. They will be contacted by the new supplier once appointed and current account balances will be honoured.
“Once a new supplier is appointed, customers can choose to stay with them or switch elsewhere, with no exit penalties. There are still around 50 suppliers in the market, making it more competitive than ever and providing more choice for consumers.”
Uswitch energy expert Emma Bush said: “GB Energy Supply is the first domestic energy supplier to go out of business in a decade, but rising wholesale prices this year are making for some tough market conditions for new, independent suppliers in particular. Many of them have recently increased bills – including GB Energy Supply, which hiked prices by almost a third only last month.
“While GB Energy Supply’s 160,000 customers will be concerned to hear today’s news, safeguards put in place by Ofgem mean there will be no interruption to their energy supply and any credit balances will be protected. We urge Ofgem to now ensure GB Energy Supply’s customers get a fair deal with a new provider as quickly as possible.”
GB Energy Supply increased its prices by an average of 30 per cent in October in response to rising wholesale prices. It said “many smaller suppliers” would also have to make similar price changes. Rising prices will “shake out” weaker suppliers his winter, Cornwall associate Peter Atherton warned in November. He said the number of suppliers in the market could fall from more than 50 to as few as 15.