Households are facing “desperate choices” this winter, with energy bills rising by £30 a month for those who have had to switch supplier owing to a wave of energy company failures, as three more collapsed on Wednesday.
Rising gas prices have driven 12 energy companies under this year, forcing the regulator, Ofgem, to transfer 2m customer accounts to surviving suppliers. The collapse of a further three will force the regulator to move 233,000 more customer accounts, with bills expected to increase as a result.
Ofgem said Igloo Energy, Symbio Energy and Enstroga had become the latest companies to succumb to a gathering crisis that shows no sign of abating, with gas prices remaining stubbornly high amid international shortages as winter approaches.
The regulator emphasised that customers would not have any disruption to the supply of energy to their homes, adding that anyone with credit in their accounts with those companies would not lose their money.
But it will have to find a new provider for nearly a quarter of a million people through its “supplier of last resort” scheme, under which financially healthy companies take on customers from collapsed rivals.
Those that were on cheaper fixed-rate tariffs, often used by smaller, start-up energy companies to woo new customers, will see their bills increase to the government’s energy cap, which is £1,277 for a household with average usage.
A report by Citizens Advice, published today, has found that consumers who are moved to a new supplier typically pay £30 a month more than before. Advisers at the charity fear many will face fuel poverty this winter and could end up turning off their fridges and freezers, relying on hot-water bottles for warmth and requesting support to buy extra duvets and blankets.
Clare Moriarty, chief executive of Citizens Advice, said: “Overnight price hikes will be a shock for more than a million households whose energy companies have gone bust. We’re particularly worried about those who’ll face desperate choices this winter because of the cumulative impact of soaring bills, the planned cut to universal credit and inflation.
“The government and Ofgem must guarantee that the warm home discount will be continued for people moving to new energy suppliers. People on the lowest incomes should be able to access emergency winter grants so they can stay warm in the cold months ahead.”
Before the latest collapses, announced on Wednesday, the number of households supplied by an energy company that had gone bust this year totalled almost 2m, forcing Ofgem into an unprecedented scramble to keep to the customer transfer system going.
Neil Lawrence, the director of retail at Ofgem, said: “We know this is a worrying time for many people and news of a supplier going out of business can be unsettling.
“I want to reassure customers of Enstroga, Igloo Energy and Symbio Energy that they do not need to worry. Under our safety net we’ll make sure your energy supplies continue. If you have credit on your Enstroga, Igloo Energy or Symbio Energy account, the funds you have paid in are protected and you will not lose the money that is owed to you.
“Ofgem will choose a new supplier for you, and while we are doing this our advice is to wait until we appoint a new supplier and do not switch in the meantime.
“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 tariff. Any customer worried about paying their energy bill should contact their supplier to access the range of support that is available.”
Igloo Energy is the largest of the companies that went under on Wednesday, with 179,000 customers, followed by Symbio with 48,000 and Enstroga with 6,000.
Igloo blamed high gas prices and the government’s energy price cap, which it said was a good idea but had been “designed to favour the largest suppliers”.