E4B in administration

I used to work for E4B until this morning. We were told that as of 10.21am this morning the company had gone into receivership. The staff had 1 hr to collect there possesions and to leave the premises. There was no warning or fore sight, it was business as usually until about 11.15am this morning when the whole office was gathered and told the news. I am disgusted at how as now a ex member of staff we were treated. The directors obviously knew this was going to happen but didn't even bother to try and fore warn us.

E4B have really gone belly up?

Customers will not be disconnected but will automatically be transferred to another supplier in a process organised by the regulator. Customers' tariffs may change but they will be free to switch supplier.

http://news.bbc.co.uk/1/hi/business/7684880.stm

OK, first off I work in the industry so I do know some stuff - however don't take what I say as gospel, this is just an internet forum, bear in mind I could be making up every word of this as far as you're concerned!

Why have E4B gone into administration?

They had massive debts, for various reasons. For example, for much of 2006-2007, they grew really fast, this was down to offering the lowest prices in the market, some 30-40% lower than their competitors. However they were in fact making a big loss on these meters, losses which have now been realised. One can only presume that their strategy was to get a lot of customers and then sell on the business, making lots of money for the shareholders. The bigger the company when they sold it on - the more money they would make.

I (used to) work for E4B, why weren't we told?

I can only guess, the bad news would've caused a drop in morale. Who really knows, management do strange things at times.

What will happen to the meters supplied by E4B?

The BBC thread links to / the post by ex-energywatch adviser below sum up the situation quite well. No-one wanted to buy E4B - discussions have probably been going on behind the scenes to find a buyer for a while but as the BBC article says - no buyer has been found. This means that the "supplier of last resort" clause will come into play - ofgem will give supply of the meters to a new supplier - I suspect that will be decided by the end of the week. This has happened in the past - here's a link to an ofgem release from when this situation has occured before as an example. http://www.ofgem.gov.uk/Pages/MoreInformation.aspx?docid=28&refer=Media/PressRel

I am supplied for E4B - what does this mean for me?

Your previous contract and prices will be declared null and void, as they are with a now defunct company. The status of your debt (if any) with E4B is unclear, you could try contacting them but no-one has been answering the phones there all day. The administrators will try to repay as many debts as possible, so they may well want their money back from you.

As regards going forward, you will be put on out of contract prices with your new supplier as chosen by ofgem. Ofgem will choose the supplier offering the lowest rates for you, so long as ofgem think the supplier can take on E4B's customers without trouble. This means it will almost certainly be one of the Big 6. However you will be free to leave that supplier to join another, or to sign a contract with that supplier. There's a good chance that either of these options are likely to save you money compared to the tariff you will initially be placed on.

If you are currently supplied by E4B, then I strongly advise you check your current prices!

1) If you are on under 10p per unit, as many of you will be, then I would prepare now for your bills to go up as a result of this. You signed at rates below the current market, rates which were guaranteed for the length of your contract, but now the contract is null and void so you will have to agree a new contract at current market rates.

2) If you are on 14p or more, possibly as a result of an automatic renewal of your contract (of which there has been much complaining on these forums) then this is good news for you - you will now be free to sign a new contract with another supplier at lower prices. 10p-14p per unit is about what you will get at the moment for business supplies.

I hope this information is useful for all you money-savers And whilst you may be happy that the company has gone bust, try to spare a thought for the 150 or so employees of the company who have lost their jobs 2 months before Christmas, most of whom had no say in the business strategy and were just following orders.

iamesbo - there is a lot more involved with suppling electricity than just generating it! Take for example the national grid, they don't produce electricity, they just own/maintain the nationwide pylons etc. Then there's the guy who reads your meter, there's the local distribution company (they own the wires between the national grid and your house) and a host of other agents as well.

The job of a supplier is to pay all these other agents - and the generator as well of course - and charge you for it all. Imagine if every person out there had to pay all the agents I have listed above - it would be chaos! Therefore electricity suppliers are there to deal with all that for you. E4B are/were one of these suppliers.