Orbit Energy becomes the latest UK firm to go bust




  • In Business
  • 2021-11-25 15:29:04Z
  • By BBC
Smart meter
Smart meter  

Another energy supplier has gone bust following the surge in gas prices.

Orbit Energy confirmed on its website on Wednesday that it has ceased trading.

It is the latest company to go under as higher wholesale gas prices have made price promises by suppliers to customers undeliverable.

Orbit said energy supplies to its customers were "secure" and added the energy regulator Ofgem would find new companies to service them.

"Ofgem's advice is not to switch, but to wait until they appoint a new supplier for you," the company said.

"This will help make sure that the process of handing customers over to a new supplier, and honouring domestic customers' credit balances, is as hassle free as possible for customers."

The collapse of Orbit comes after Bulb, the UK's seventh largest energy supplier, was handed about £1,000 per customer from the UK government 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 23 energy suppliers have now failed following a spike in gas prices.

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.

Orbit customers 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.

What happens if your energy supplier goes bust?

  • Customers will still continue to receive gas or electricity even if the energy supplier goes bust. Ofgem will move your account to a new supplier, but it may take a few weeks. Your new supplier should then contact you to explain what is happening with your account

  • While you wait to hear from your new supplier: check your current balance and - if possible - download any bills; take a photo of your meter reading

  • If you pay by direct debit, there is no need to cancel it straight away, Citizens Advice says. Wait until your new account is set up before you cancel it

  • If you are in credit, your money is protected and you'll be paid back. If you were in debt to the old supplier, you'll still have to pay the money back to your new supplier instead

Read more about the next best steps to take here.

COMMENTS

More Related News

Natural Gas Plunges 11% on Demand-Killing U.S. Weather Outlook
Natural Gas Plunges 11% on Demand-Killing U.S. Weather Outlook

(Bloomberg) -- Natural gas futures plummeted 11% in the U.S. as forecasts shifted warmer through the middle of next month, allaying concern about tight...

Fed chair? Check. Releasing petroleum? Check. What else can Biden do to try to tame inflation?
Fed chair? Check. Releasing petroleum? Check. What else can Biden do to try to tame inflation?

President Joe Biden's options for slowing inflation are limited as consumer prices surge to their highest level in 30 years, economists say.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Business