Two more energy suppliers collapse
Pure Planet supplied gas and electricity to about 235,000 domestic customers and Colorado Energy supplied both fuels to around 15,000 households.
Pure Planet was backed by BP. In a statement on its website, the company blamed the government and energy price cap for forcing it to close down.
The statement said: “So why are we yet another energy supplier to have failed? Was it because we are ‘small’? No. Was it because we are badly run? With respect, we’d argue not. Did we get everything right? Of course not. We could always have improved.
“But it’s because, despite all the good things we’ve mentioned, we were being forced to lose money through sky-rocketing global wholesale energy prices clashing with a domestic staid government and regulatory policy — the price cap.
“Simply, the rules prevented us from covering our costs. We are being forced to sell energy at prices way below the true cost. That’s wiped out those forecast profits and turned them into a thumping great loss, with even more risk on top.”
The energy price cap sets a maximum amount that customers can be charged per unit of energy. But if energy suppliers have to pay more than this to buy wholesale energy, there is no similar policy in place to protect them.
Under Ofgem’s safety net, Pure Planet and Colorado Energy customers’ energy supply will continue and money in customers’ accounts will be protected.
Customers of both firms will be contacted by their new supplier, which will be chosen by Ofgem. In the meantime, customers are advised to wait until a new supplier has been appointed and been in contact before looking to switch to another energy supplier.
Households should take a meter reading ready for when their new supplier gets in touch. This will make the process of transferring customers over to the new supplier and being refunded any cash in their accounts as smooth as possible.
Richard Neudegg, head of regulation at Uswitch, said: “While this is not the news that anyone wanted to see, affected customers can be reassured that their energy supply will continue as normal and their credit balances will be protected.
“These latest collapses mean that 14 suppliers have now crashed out of the market since the beginning of 2021, displacing almost 2.4 million customers. Out of this pool of failed suppliers, nearly two million customers have been displaced since September alone.
“Pure Planet’s collapse has been blamed on its main financial backer, BP, which owns a 24% stake, choosing to cut off support for the business.”