Snowdrop Energy is in the process of transferring all its customers to fellow Sheffield-based energy supplier Nabuh Energy, Utility Week understands.
The company said on its website that the “continued increase in wholesale market prices” has put pressure on its business, which has sparked the decision to “protect” its customers through winter.
“We have taken the decision to exercise our right in line with our terms and conditions to transfer all of our supply contracts over to Nabuh Energy,” Snowdrop said.
The energy supplier has advised customers that any credit balances will be safe. The company is thought to have had around 6,000 customers, who will be switched automatically to Nabuh Energy.
The process is expected to complete around 2 November. Once the switch is complete customers will be able to choose to stay with Nabuh or switch to another supplier with no exit fees.
Nabuh Energy is believed to have up to 20,000 customers having been picking them up at a “steady pace”.
Its chief executive Klaus Bach says on the company’s website: “We think like a customer and we know what you as the customer want. The difference is, Nabuh Energy can deliver it.”
The news follows the demise of Usio Energy, which ceased trading at the start of this week.
Its 7,000 customers have been rescued by First Utility after the company was chosen by Ofgem as the supplier of last resort following a competitive tender process.
The collapse of Usio prompted predictions that other small energy suppliers could also close before the end of the year.
In March this year, it was revealed that Toto Energy would transfer thousands of its customers to Utilita Energy the following month.
Toto said it had been “pushing hard” to improve all aspects of its business and that it made the decision for the “good” of customers.
Its handling of the transfer was criticised by Citizens Advice, which described the company’s communication to customers as “appalling”.
The energy supplier ranked bottom for its customer service in a league table published by Citizens Advice earlier this month.
Toto received a score of 1.45 out of five stars for the period from April to June 2018. This was down from a score of 1.6 the previous quarter, when it placed second from bottom ahead of the now defunct Iresa.
Snowdrop Energy was granted its supplier licence by Ofgem in December 2016 and the company claimed to supply 100 per cent renewable power “as standard” across all its tariffs.
Its about us section of the company website said: “After years of working with energy companies, and being customers of many, we realised – there is a better way. We were fed up of how poor the big suppliers treated their customers, so we decided to do something about it. We setup Snowdrop – the gas and electricity supplier that’s independent, sustainable, smart and doing good.”
The company said it was 100 per cent owned by its people – the people who worked in its office, answered the phones, bought the energy and built the software.
“We don’t have any investors (yet) and we make decisions based on common sense and what we believe is the right thing to do. One day, we might take investment, but it will be from the right people who believe in our values and our culture.”
It added: “We are not a perfect company, not even close, but our intentions are always good. We know we’ll make mistakes, we’re only human and we would like to be judged by the good we do and not for the mistakes we make.”
According to details filed on Companies House, Snowdrop Energy only has one active officer, Ashley Tate, who is listed as a director. Tate is described as a founder of Snowdrop Energy on LinkedIn.
He was appointed in February last year, which coincided with four officer resignations.
An Ofgem spokesperson said: “We are aware of the purchase of Snowdrop Energy’s customers by Nabuh Energy. Ofgem scrutinises any commercial transfer of customers to ensure that the deal does not cause detriment to the customers, including by ensuring credit balances will be honoured.
“If we were not convinced the deal is in customers’ best interest, we would intervene to prevent the sale.“