Entice and Orbit become latest energy firms to go bust
|bbc.com 25 Nov 2021 at 16:07|
The two firms are the latest companies to go under as higher wholesale gas prices have made price promises by suppliers to customers undeliverable.
Ofgem said new suppliers would be found for the two companies customers.
Households have been advised to wait until a new supplier is appointed before thinking about switching company.
Neil Lawrence, director of retail at Ofgem, said: "I want to reassure affected customers that they do not need to worry: under our safety net we ll make sure your energy supplies continue. "
Orbit said energy supplies to its customers were "secure" and said any credit balances would be honoured.
The collapse of Orbit and Entice comes after Bulb, the UK s seventh largest energy supplier, was to enable it to continue supplying energy.
Bulb, which has 1.7 million customers, is the largest company to date to face difficulties in recent months and was put into special administration, which will allow it keep trading for the moment with a £1.7bn loan.
It will be run by an administrator until a buyer can be found or until its customers have moved.
Bulb s size is the reason it has been kept afloat by the government, rather than its customers being transferred to other suppliers, as has happened with other failing energy providers.
Since the beginning of September, a total of 24 energy suppliers have now failed following a spike in gas prices.
"As suppliers continue to fall like dominoes, it s clear the market is not functioning as it should and there are serious questions for Ofgem to answer about how this has been allowed to happen," said Gillian Cooper, head of energy policy at Citizens Advice.
As a result of a cap limiting what companies can charge their customers, some businesses have been forced to sell energy for less than they bought it for, due to rising wholesale gas prices.
Bigger companies tend to buy gas further in advance, which helps them avoid large hits from a price spike. However, smaller firms are less able to do and have come under pressure.
Customers of Orbit and Entice will be switched to a new tariff by Ofgem and be contacted by their new supplier.
The regulator has previously advised people to take a meter reading and to wait until a new supplier has been appointed before looking to switch to another energy firm.
Ofgem has said that consumers will also be protected by the energy price cap, which limits how much firms can charge per unit of gas, once switched to a new tariff.