Two more energy firms on brink of insolvency
Green has nearly 250,000 customers and employs about 200 people. According to Sky News, it has approached Alvarez & Marsal to discuss making use of Ofgem’s ‘supplier of last resort’ mechanism. This process ensures continuity of supply for customers when an energy firm goes out of business.
Green’s CEO Peter McGirr told The Independent that the firm would not survive without government support – but the government said yesterday that it will not be bailing out failing energy firms.
Fellow small supplier Igloo Energy is also in discussions with Alvarez & Marsal about potential insolvency. Earlier this week it was ordered by the energy regulator Ofgem to pay £316,582.44 in feed-in tariff (“FIT”) ‘levelisation payments’.
A statement on Igloo’s website said: “The state of the wholesale energy market is the worst we have ever seen it, with soaring prices impacting all suppliers… We would like to reassure you that no matter what happens, your energy supply and any credit balance you have, is completely safe.”
Wholesale gas prices in the UK have tripled this year after the global economic recovery from the pandemic prompted a spike in demand. The surge in wholesale gas prices has led to the collapse of several small providers in recent weeks and there are concerns more suppliers could fold.
Analysis by union GMB, the energy union, reveals the bosses of these four failed energy suppliers banked almost £1.7m in pay and benefits last year.
MoneyPlus collapsed leaving a reported 40,000 customers with potentially higher bills – but it dished out £580,000 to its top staff over the past year.
Gary Smith, GMB general secretary, said: “This is what bandit capitalism looks like. Ordinary people are going to pay the price in rising costs and fuel poverty while these directors apparently get to walk away wealthy.
“Our energy supply is critical to national security and affordability. It’s not a game. These energy companies were spending customer money that they were in credit with. How much in customers money has been lost during this fiasco?
“We urgently need an energy and industrial strategy based on the UK’s real-world needs to safeguard the future – and any prospect of bailouts must come with cast-iron guarantees to help deliver those changes so we can tackle this growing crisis.”