MSE News: Small energy supplier One Select stops trading - what you need to know

System

brewerdave wrote: »

Wasn't suggesting that they should act as auditors for existing businesses -there are other bodies who do this - but surely some checks when a new supplier applies to be licensed, are only "common sense"? As you say ,some form of insurance bond seems logical -yes, it would increase prices but smaller operations should still be able to undercut the "competition" of the Big 6.

The problem, as I see it, is not the first 12 months which is the period when most new suppliers are making a loss but thereafter. Iresa failed because it got greedy and decided to ramp up customer numbers without putting in place sufficient trained CS staff. Complaints then rose exponentially and Ofgem started to take an interest. Iresa failed because they couldn't dig themselves out of a hole of their own making which was accelerated by Ofgem's ban on them taking on new customers. I am not sure how an Ofgem check when a Licence is first applied for can stop this from happening?

Taking Spark Energy as an example, the accounts as 30 Jun 17 show a loss before tax of £8K (£116K profit in the previous year). The Spark Group of companies made a profit before tax of £4.3M and had net assets of £13.6M.

Some might argue that as Spark Energy was posting a loss in 2017, consumers should have been warned/concerned. The said, compared to the loss posted by Bristol Energy, Spark's loss was peanuts. The difference is that Bristol Energy has backers with deep pockets: that is, the local Council. I am not sure what any Regulator can do other than ensure full regulatory compliance ( which in my opinion Ofgem is not very good at), or let the supplier hit the buffers.

I cannot see Ofgem telling owners of PCWs that it has concerns about Suppliers A, B and C.

merchcon55

I am not sure how to post a screenshot or jpeg here. I would post the price chart, as truly a picture is worth 1000 words.

Natural Gas prices - in total contrast to Oil prices - have shot up dramatically. Mid Sept price was around $2.80. Even start of November was just $3.20

There was then a sharp upward price movement and by mid-November price was $4.70 - almost a 50% jump !!

Price now is around $4.40 (all quotes are for US Natural Gas - European prices are in fact higher).

While smaller companies may have done some hedging to protect against price increases, they in fact may have done no hedging. In this case, they are simply not in a position to continue trading at current market prices.

wavelets

Ofgem appoints Together Energy to take on customers of OneSelect

OneSelect’s customers will be supplied by Together Energy as of Friday 14 December. Accounts will be fully set up as soon as possible over the coming weeks.

Together Energy is the trading name of Eddington Energy Supply Limited

masonic

Brief assessment here

Anthorn

brewerdave wrote: »

I disagree - this is a MoneySaving site after all!

1. we are being actively encouraged to switch by the Government to save money. Just looking at the comparison tables today, for my leccy usage , the cheapest Big 6 tariff would cost me £145 more pa. There are still many cheaper alternatives ,some of which would actually be cheaper than the OneSelect deal I was on. By inference ,you are saying that any of these is a "bad" choice.

2. OFGEM SHOULD (in my opinion) take responsibility for ensuring that the businesses that they issue licenses to ,are fit and proper businesses. And from the looks of various pronouncements lately, OFGEM themselves realise that!

OFGEM is already taking action on supplier licenses.

I think the way it's going at the moment attempting to save money with a small supplier's unrealistically cheap tariff is only a temporary solution before it goes under and we get transferred to the SoLR and then we switch to another small supplier and the embarrassing process starts again.

I've been Big Six for the last 2 years and I stayed Big Six when I switched to EDF which completed a few days ago. I don't have the problem of wondering if my energy supplier is going to stay up or go down and I don't have to wonder where my account will end up when my supplier does go down. I pay more for my energy than if I went with a small supplier but only £56 a year more. To me peace of mind is worth that.

Lastly, I don't think I'm unique in staying Big Six as a result of the failure of small suppliers and if that's true we can expect the expansion of the dominance of the Big Six and consequently expecting small energy suppliers to break that dominance is pretty much futile!

Streaky_Bacon

I understand that when this happens a new supplier will be appointed and that they will put you on a deemed tariff.

When does that tariff change take effect?

If my meter reading is 9000 on April 1st, and the new supplier takes over on April 10th when my meeting reading is 9200, are those 200 units charged at the old tariff or the new tariff?

masonic

Streaky_Bacon wrote: »

When does that tariff change take effect?

If my meter reading is 9000 on April 1st, and the new supplier takes over on April 10th when my meeting reading is 9200, are those 200 units charged at the old tariff or the new tariff?

In this case the tariff change takes place today. Units used prior to that are charged by OneSelect in Administration.

masonic

Anthorn wrote: »

I've been Big Six for the last 2 years and I stayed Big Six when I switched to EDF which completed a few days ago. I don't have the problem of wondering if my energy supplier is going to stay up or go down and I don't have to wonder where my account will end up when my supplier does go down. I pay more for my energy than if I went with a small supplier but only £56 a year more. To me peace of mind is worth that.

As it happens, the difference between the current cheapest tariff and Together Energy's variable tariff is ~£60 per year for me. The savings I've made over the last 2 years greatly outweigh any inconvenience of being on a Big Six-level tariff for a few weeks. I certainly don't want to pay Big Six prices at a tiny supplier with a poor feedback rating.

It just so happens the cheapest tariff for me at the moment is provided by a firm with over 300,000 customers (6 month old data), so I'll be moving to relative safety.

Anthorn

Streaky_Bacon wrote: »

I understand that when this happens a new supplier will be appointed and that they will put you on a deemed tariff.

When does that tariff change take effect?

If my meter reading is 9000 on April 1st, and the new supplier takes over on April 10th when my meeting reading is 9200, are those 200 units charged at the old tariff or the new tariff?

Depends on the Supplier of Last Resort and its communications with the failed supplier and what funding that OFGEM determines is needed. So a definitive answer cannot be given. Consult the documentation you will receive from the SoLR.

I'd say that those 200 units are charged at the old rate according to your contract with the failed supplier but maybe not.

masonic

Anthorn wrote: »

Depends on the Supplier of Last Resort and its communications with the failed supplier and what funding that OFGEM determines is needed. So a definitive answer cannot be given. Consult the documentation you will receive from the SoLR.

I'd say that those 200 units are charged at the old rate according to your contract with the failed supplier but maybe not.

The effective date of appointment has been communicated in the press release and FAQ. The SoLR takes over the supply from the effective date of appointment and this coincides with the date the failed supplier's licence is revoked. So a definitive answer about energy used prior to this can be given. There is currently uncertainty around the charges to be applied from today onward.