Ofgem has confirmed two more energy companies are to exit the market, leaving more than half a million customers for a new supplier to pick up.
Utility Point, which supplied around 220,000 domestic customers and People’s Energy, which supplied 350,000 domestic and around 1,000 non-domestic customers, both exited the market just one week after the regulator announced PfP Energy and Money Plus Energy were ceasing to trade.
An Ofgem executive told Utility Week the question of how to alleviate the intense pressures on the retail sector was now “a key point of discussion”.
People’s Energy was formed in 2017 as a social enterprise by couple David Pike and Karin Sode. The company aimed to return 75 per cent of its profits back to its customers.
In a message to customers on its website the company said it was “saddened” to inform them it was ceasing to trade.
A similar message was posted on Dorset-based Utility Point’s website.
Commenting on the failures Neil Lawrence, director of retail at Ofgem, issued the usual advice for customers to wait until a new supplier has been appointed.
The latest failures take the total this year to seven. The previous record year for suppliers ceasing to trade was in 2019 when nine exited the market.
It comes amid soaring power prices, with average prices in the day-ahead market trending at more than £400/MWh this week, up from the previous record high set last week of £285/MWh.
At Utility Week’s Consumer Vulnerability & Debt Conference today (14 September), Ofgem’s head of retail market policy, Meghna Tewari was asked what protections the regulator could offer retailers while guarding the public against excessive bill shocks.
“It is something that is being thought about internally”, she replied, adding: “Our chief executive has been out there talking about the pressure on the industry and also the challenge of maintaining market integrity. It’s a key point of discussion internally. I’m sure whatever we think will be made public in the next few weeks.”
In a recent interview with Utility Week, Jeff Hardy, a senior research fellow at the Grantham Institute for Climate Change and the Environment at Imperial College London, expressed concerns about larger disruptor brands.
He warned that “if you haven’t got anything that de-risks your exposure to wholesale prices as a supplier, then I think you are going to be in deep trouble”.
Elsewhere Andrew Stone, managing director at Interpath Advisory, said rising pressures in the energy retail market such as soaring wholesale costs have meant that liquidity has become a “primary concern” for many businesses in the sector.