Scottish Power has been chosen as the supplier of last resort to take on the 108,000 domestic customers and 21,000 business customers of Extra Energy, which ceased trading.
The appointment follows a competitive process run by Ofgem to get the “best deal possible” for the customers.
Scottish Power said it will offer Extra Energy’s customers a competitive tariff and will honour all outstanding credit balances, including money owed to both existing and former domestic and business customers of Extra Energy.
The big six supplier, which already provides energy to more than 5 million households and businesses, is taking responsibility for the customers from today (25 November).
Ofgem interim director for future retail markets Philippa Pickford said: “We are pleased to secure a deal with Scottish Power, where Extra Energy’s domestic and business customers will be offered a competitive tariff for their energy. Their credit balances will be honoured, and their energy supply will continue as normal.”
Scottish Power chief executive Keith Anderson said the new customers have “no need to worry” and should “sit tight”. “They are joining a safe and stable integrated energy company that will soon uniquely generate power from 100 per cent green sources and invests every day to make renewable energy cheaper.”
Extra Energy had struggled with customer service, coming bottom in Citizens Advice’s customer service league table for the second-time running in 2017.
It is not the only supplier forced to shut up shop. On Friday, Ofgem announced that Spark Energy had ceased trading because of “tough conditions”. And industry commentators believe there will be more.
This spate of closures has forced Ofgem to consider new financial and customer service tests for suppliers seeking a supply licence.
Under the proposals, companies would have to demonstrate they have “adequate financial resources” and can meet their customer service obligations before being awarded a licence.
This means they must provide the regulator with a plan to meet its handling standards and obligations to assist customers in vulnerable circumstances.