Tonik Energy, who supplied energy to around 130,000 domestic customers, recently announced that they were to cease trading. As was the case with both Robin Hood Energy and Bristol Energy, who also recently went bust, a statement was released by the supplier, assuring their customers that they shouldn’t worry, their energy supply will not experience any interruption and they will soon be contacted by their new supplier… But, are they right to say you shouldn’t worry?
It prompted us to wonder how many people understand what happens if their energy supplier goes bust and how it could affect them…
So, What Happens If My Supplier Goes Bust?
If your supplier goes bust, then, in order to protect the customer’s interests, Ofgem’s ‘safety net’ kicks in. This safety net ensures that there is no interruption to the supply of either gas or electricity. In fact, you shouldn’t notice any change at all.
Do I Need To register With A New Supplier?
No. When a supplier goes bust, Ofgem will appoint a new supplier via a stringent tender process designed to get the best deal for the existing customers. Once a new supplier is selected, they will get in contact with you. For example, in the case of Tonik Energy, Scottish Power have been appointed to take care of all existing customers.
When Will I Know Who My New Supplier Is?
Ofgem aim to appoint a new supplier within a few days of your original supplier going out of business. Once a decision is made, Ofgem will publish the outcome on their website and the new supplier will then begin to contact customers.
Is There Anything I Should Do?
It is usually recommended to make note of your meter readings, but, other than that, you shouldn’t do anything until your new supplier contacts you, as aside from anything else, you may have a credit balance to collect first.
Your new supplier will automatically place you on their standard default tariff – These tariffs are typically variable and poor value – So, once contacted, you should either request to be placed on their cheapest deal, or, if you’re not happy with this, shop around and find a better deal with a different supplier and switch. At this point, having not entered into a new agreement with your new supplier, you will not face any exit fees, even if your previous tariff stated one.
So, Are They Right To Say I Shouldn’t Be Concerned?
Unfortunately, the answer isn’t completely straightforward. With regards to interruption to supply etc, they are correct in saying that the process is seamless, and, in that respect, you probably wouldn’t even notice that you had switched suppliers.
That being said, you do need to be on the ball. As explained, your new supplier will automatically place you on their standard default tariff, which is likely to cost more than your previous tariff. They do this in the hope that you will remain on it and they will not switch you to a better suited tariff unless you specifically request this.
Our recommendation is to make the most of the situation and shop around and to find the best deals for your circumstances. Your early exit fees will be wavered, even if you are only a few months into your agreement, and with energy rates constantly fluctuating and new deals becoming available all the time, you may even benefit by finding a cheaper tariff than the one you were on previously!