Ofgem’s safety net will be used for a second time already this year as small energy supplier Our Power has ceased trading.

The regulator will choose a new supplier to take on the 38,000 customers of the failed company “as soon as possible”.

Our Power was established in 2016 as a not-for profit energy supplier. The company’s mission was to “make energy fairer and to help those at risk of fuel poverty”.

Philippa Pickford, Ofgem’s director for future retail markets, said: “Our message to energy customers with Our Power is there is no need to worry, as under our safety net we will make sure your energy supplies are secure and your credit balance is protected.

“Ofgem will now choose a new supplier for you, ensuring you get the best deal possible. Whilst we’re doing this our advice is to ‘sit tight’ and don’t switch. You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your new tariff.

“We have seen a number of supplier failures over the last year and our safety net procedures are working as they should to protect customers.”

Prepayment meter customers will also be able to top up as normal, the regulator has advised.

Our Power said on its website that it is “with great regret” that the company has ceased to trade.

In March last year Our Power teamed up with Mongoose Energy to tackle fuel poverty in Scotland with the creation of “Our Community Energy” – a renewable energy investment scheme.

Our Power’s closure follows Economy Energy’s exit from the market earlier this month. Its 235,000 domestic customers were transferred to Ovo Energy.

Speaking at Utility Week’s Energy Customer Conference in Birmingham last week (17 January), Ofgem’s director of conduct and enforcement, Anthony Pygram warned that the supplier of last resort mechanism is there to protect consumers, and not as an “insurance policy for dodgy business models”.

Meanwhile at the regulator’s “Energy of the Future” conference in London on 10 January, its chair Professor Martin Cave said that Ofgem will be outlining plans to tighten up controls on how suppliers handle customers’ balances later this year.

In his keynote speech he said Ofgem is already consulting on introducing customer service and financial tests for new suppliers.

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