Hub Energy has become the third retailer of 2021 to cease trading, Ofgem has announced this morning (9 August).
The Lancashire-based supplier had about 15,000 customers in total, including 9,000 non-domestic and around 6,000 domestic customers.
Neil Lawrence, director of retail at Ofgem, said: “I understand that a supplier going out of business is unsettling for customers, however Hub Energy customers do not need to worry.
“Under our safety net we’ll make sure your energy supplies continue and if you are a domestic customer and have a credit on your bill with Hub this is protected and you will not lose the money that is owed to you by Hub.”
A new retailer will take on Hub’s customers under the supplier of last resort (SoLR) mechanism.
A statement on the company’s website told customers not to worry and reiterated the standard advice issued by the regulator when a supplier fails.
Hub is the third retailer to fail this year and joins Green Network Energy and Simplicity Energy, both of which exited the market in January.
Four suppliers entered the SoLR process last year. They were Gnergy, Effortless Energy, Tonik and Yorkshire Energy.
Council-backed suppliers Robin Hood and Bristol Energy both ceased trading and sold their customers to other retailers.
Ofgem’s expectations
Last week Lawrence wrote an open letter to all energy retailers setting out Ofgem’s expectations of energy supply companies regarding financial stability.
New requirements were introduced earlier this year aimed at improving standards of financial resilience and consumer protection following Ofgem’s supplier licence review.
The new financial responsibility principle requires suppliers to make sure that they are managing their finances effectively and actively, minimising the extent of cost mutualisation in the event of their failure.
Lawrence outlined the need for suppliers to have robust financial governance and decision-making frameworks in place, as well as sustainable pricing approaches and effective processes consistent with the licence requirements.
“We also expect suppliers to make early notifications to Ofgem of any financial stability issues, as well as other key business developments. This is in line with our new principles-based requirement for suppliers to be open and cooperative with Ofgem,” he said.
Lawrence warned Ofgem was prepared to act “swiftly and decisively” where businesses do not comply with their regulatory obligations, including by taking further compliance or enforcement action where appropriate.
“We remain committed to achieving a culture where businesses act in line with their obligations, and with visible and meaningful consequences for those who fail to do so,” he added.