Council owned energy suppliers and Private Eye report and risk/strategy

barker77

I am with Robin Hood.

I chose them as I think that they deserve to be backed and I believe that they have the equity to survive long term.

FullForce

LittleGreyCatUK wrote: »

Quite a long title.
We are looking at switching suppliers and Bristol Energy and Robin Hood (via Ebeco) are in the mix. Looking for a fixed rate deal, for 2 years if possible.
There was an article in Private Eye this week saying that Bristol Energy was losing money, Robin Hood had only just eased into the black.

My understanding is that if you take out a deal with one of these small companies and the company folds you will retain your deal and you will be transferred to another supplier. If you are on a fixed rate deal and energy prices are rising, this will not be attractive to other suppliers if they are guaranteed to make a loss for the remaining term. How does this work, then?

My understanding, also, is that with stable or falling energy prices the small suppliers without their own generating/production capacity can undercut the big players who have to hedge long term. However if the energy prices are rising then the small players take the hit first and have to raise prices because they don't have the capital to hedge.

Apart from the B word, the USA flexing muscles at Iran could signal a major disruption in oil and gas supplies, forcing prices up. A major drop in the UKP could also make anything traded in dollars more expensive in the UK.

Based on that, a couple of questions:

(1) Is a sound (if immoral) strategy to go for the lowest priced fixed rate deal in the knowledge that if the supplier fails you will be allocated another supplier?

(2) What happens if a supplier fails and no other energy supplier wants you as a customer?

Tin hats everyone!

OP - I suggest you look at British Gas as your supplier.
They made over £400million profit last year, and their parent company well in excess of £1billion.

Ever wondered how a supplier makes so much profit? Perhaps a glance at their position in any comparison site will explain.

Ebico have always classed themselves as a non-profit making organisation.
Ebico have been continuously trading as such since the end of the last century.

Robin Hood Energy also class themselves as a not for profit organisation, but have not been around as long as Ebico have.

Lyncj01

Another one bites the dust:

“Gen4U, a small supplier with approximately 500 domestic customers, is ceasing to trade. Ofgem is appointing Octopus Energy as the supplier of last resort for these customers.

“Customers do not need to worry, they will continue to receive energy supplies as normal and credit balances will be protected.”

System

Lyncj01 wrote: »

Another one bites the dust:

“Gen4U, a small supplier with approximately 500 domestic customers, is ceasing to trade. Ofgem is appointing Octopus Energy as the supplier of last resort for these customers.

“Customers do not need to worry, they will continue to receive energy supplies as normal and credit balances will be protected.”

It’s been on the radar for some time:

https://www.elexon.co.uk/documents/industry-news/elexon-circulars/el02858-defaulting-party-under-the-bsc-2/

System

nic_c wrote: »

The OP was looking at council owned energy suppliers - surely less likely to go under than small suppliers?

The biggest risk to the 2 council-owned energy suppliers are their backers. It was reported that Bristol Energy lost £8.4M last year despite having received over £27M in support from Bristol Council taxpayers. Bristol Energy is reportedly not due to start paying back its investors until 2021 - 2 years later than planned.