Ofgem price cap ‘fundamental problem’ says Ecotricity founder
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Small energy firm Bluegreen Energy announced that it had ceased trading today – leaving almost 6,000 customers without a supplier.
Around 5,900 households have been left without an energy supplier following the failure, along with a small number of businesses.
Bluegreen Energy customers won’t have their energy cut off, instead they will automatically be switched to a new supplier.
Any credit you have on your account will also be protected, Ofgem, the energy regulator, said, and you’ll be protected by the Energy Price Cap.
Neil Lawrence, director of retail at Ofgem, said: “Ofgem’s number one priority is to protect customers.
“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 affected customers that they do not need to worry: under our safety net we’ll make sure your energy supplies continue.”
Affected customers are being reassured that they will not suddenly be cut off.
Ofgem said that they should continue as normal and wait until they are contacted by a new supplier in the coming weeks.
In the meantime, they should take a meter reading ready for when when they are transferred to a new supplier, the regulator said.
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The news came after whole sale gas prices have skyrocketed by up to 250 percent since January.
This huge rise combined with the government price cap has pushed at least 12 firms over the edge since the summer.
Utility Point and People’s Energy were two of the first firms to close down, followed by a string of small suppliers that also collapsed under the pressure of sky-high prices.
And just last week customers were warned last week that that Bulb could be the next energy supplier to go bust.
The UK’s seventh largest energy firm is reportedly teetering on the brink of collapse, which would leave 1.7 million customers without a supplier.
In a bid to relieve pressure on the battered firm, Ofgem has promised to look again at the price cap.
In a letter to suppliers, Ofgem said: “The unprecedented and unexpected rise in gas and electricity prices over recent months has put energy markets under severe strain.
“As this period of uncertainty continues, and the pressure on the sector grows, we are taking steps to protect the short- and long-term interests of consumers, providing greater certainty for investors and strengthening the resilience of the sector.”
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