PfP Energy ceases trading - here's everything you need to know

devondiver

QrizB said:

devondiver said:

... 'the funds' (which do exist) ...

Evidence, please, that the funds do exist?

Der . . 🥱

Are you suggesting that British Gas etc. are all insolvent?

devondiver

lisyloo said:

agentcain said:

QrizB said:

devondiver said:

... 'the funds' (which do exist) ...

Evidence, please, that the funds do exist?

Bank transfer statements minus energy bills.
If the net result is positive, they exist unless someone consumed them unlawfully.

You don’t really understand how businesses and cash flow works do you.
you don’t have an individual physical piggy bank at the supplier.
cash flow means your money would have been (lawfully) used to pay other bills.
this is a perfectly lawful process called business cash flow.

No need to get personal, or overly simplistic.  

QrizB

devondiver said:

QrizB said:

devondiver said:

... 'the funds' (which do exist) ...

Evidence, please, that the funds do exist?

Der . . 🥱

Well that's a refreshingly direct answer.

• The funds don't exist. They were spent by the bankrupt supplier in trying not to go bankrupt.
• Any account credit will be transferred as a nominal value (not a pot of cash) to the SoLR.
• The SoLR will add the credit to your account, and in doing so will increase their own indebtedness. They will then claim reimbursement from Ofgem.
• Ofgem will instruct the networks to add the cost to their charges.
• Network charges will be paid by us all during 2022-24 and passed back to Ofgem.
  
• Eventually the SoLR will be reinbursed by Ofgem and will be able to pay down their debts.

There will be an audit trail for this, and it will be available in summary on Ofgem's website.

Here's an example. When Iresa went bust, Octopus were appointed as SoLR. Octopus were reimbursed ~£11M by Ofgem for "cost of credit balances". Iresa had 90k gas-only customers at a time when gas was a lot cheaper than it is now.

devondiver

QrizB said:

devondiver said:

QrizB said:

devondiver said:

... 'the funds' (which do exist) ...

Evidence, please, that the funds do exist?

Der . . 🥱

Well that's a refreshingly direct answer.

• The funds don't exist. They were spent by the bankrupt supplier in trying not to go bankrupt.
• Any account credit will be transferred as a nominal value (not a pot of cash) to the SoLR.
• The SoLR will add the credit to your account, and in doing so will increase their own indebtedness. They will then claim reimbursement from Ofgem.
• Ofgem will instruct the networks to add the cost to their charges.
• Network charges will be paid by us all during 2022-24 and passed back to Ofgem.
  
• Eventually the SoLR will be reinbursed by Ofgem and will be able to pay down their debts.

There will be an audit trail for this, and it will be available in summary on Ofgem's website.

Here's an example. When Iresa went bust, Octopus were appointed as SoLR. Octopus were reimbursed ~£11M by Ofgem for "cost of credit balances". Iresa had 90k gas-only customers at a time when gas was a lot cheaper than it is now.

Look. How can I put this as simply as possible? At some point customer credit balances are going to be settled. Up to that point the funds with which they will be paid is in existence. QED

But is there an answer to the overriding question?

MWT

devondiver said:

So the over-riding question remains:

What pressures currently exist to motivate Administrators/British Gas/Ofgem/Whoever to assign customer credit balances sooner rather than later?

 - And if the answer is, at it appears to be, 'little or none' then what pressures can be brought to bear which might improve this situation, when and by whom?

Short answer there is you cannot motivate the administrators to do anything beyond obtain the best possible deal for the creditors, and shareholders in order of their priority (secured first).

Generally that means nothing for the shareholders, little or nothing for the unsecured creditors and possibly a decent percentage for the secured creditors.

These are obligation outside of the energy supply licence which has by then been terminated so all the terms and conditions built into that instrument no longer apply.

This is why Ofgem protect the otherwise unsecured credit balances of the customers.

devondiver said:

The fact remains that the longer that 'they' can continue to withhold repayments the longer 'they' benefit from holding 'the funds' (which do exist) and the greater the cost to 'us'.

There will still be money in the company as the administration process has to be paid for, you can't put a company into administration without money from somewhere, and yes, by that point the original source of the remaining working capital was undoubtedly customer balances, but it is mistake to view this as 'withholding payments'.

That money is for the most part going to be used to pay the secured creditors, the only thing being passed to the SoLR from the administrators is the data that confirms what the customers credit balance actually is, they are not providing the funds to meet that obligation.

If sufficient funds remain at the end of the administration process to make a payment to unsecured creditors then yes, that money will be used to reduce the liability on the funds administered by Ofgem, but there is no separate account within the failed suppliers where all the customer money has been held, it is just part of the businesses working capital.

This isn't like a client account at a solicitor, nor could it ever be so as the advance payments from customers are needed to pay for the advance costs of purchasing on the energy market.

Which is why I really would like to see a direct link between offering fixed tariffs to customers and actually spending those advance payments received on advance hedging, which was not the case in at least one of the major failures...

piano

QrizB said:

devondiver said:

QrizB said:

devondiver said:

... 'the funds' (which do exist) ...

Evidence, please, that the funds do exist?

Der . . 🥱

Well that's a refreshingly direct answer.

• The funds don't exist. They were spent by the bankrupt supplier in trying not to go bankrupt.
• Any account credit will be transferred as a nominal value (not a pot of cash) to the SoLR.
• The SoLR will add the credit to your account, and in doing so will increase their own indebtedness. They will then claim reimbursement from Ofgem.
• Ofgem will instruct the networks to add the cost to their charges.
• Network charges will be paid by us all during 2022-24 and passed back to Ofgem.
  
• Eventually the SoLR will be reinbursed by Ofgem and will be able to pay down their debts.

There will be an audit trail for this, and it will be available in summary on Ofgem's website.

Here's an example. When Iresa went bust, Octopus were appointed as SoLR. Octopus were reimbursed ~£11M by Ofgem for "cost of credit balances".

PFP's structure has made it rather complicated, but page 12 of the Statement of administrator's proposal (page 16 of the PDF) states "Immediately following the appointment over PFPE, the Joint Administrators of PFPE obtained control of the cash held in it's pre-appointment bank accounts totalling £5.2 million." There are legal arguments about whether this dosh belongs to PFPE or PFPES. I was assuming that a small component of this £5.2M might be the credit balances from the customers who had been overcharged - and if this was the case, that component should not be treated as an asset of the company but returned to its rightful owners... saving the additional burden on the SoLR. 

MWT

piano said:

I was assuming that a small component of this £5.2M might be the credit balances from the customers who had been overcharged - and if this was the case, that component should not be treated as an asset of the company but returned to its rightful owners... saving the additional burden on the SoLR. 

The customers are unsecured creditors so they have to take their turn after all the secured creditors and ahead of the shareholders.

You can't ring-fence part of the assets of the company just because the money is owed to an unsecured creditor.

devondiver

lisyloo said:

devondiver said:

Llisyloo said:

agentcain said:

QrizB said:

devondiver said:

... 'the funds' (which do exist) ...

Evidence, please, that the funds do exist?

Bank transfer statements minus energy bills.
If the net result is positive, they exist unless someone consumed them unlawfully.

You don’t really understand how businesses and cash flow works do you.
you don’t have an individual physical piggy bank at the supplier.
cash flow means your money would have been (lawfully) used to pay other bills.
this is a perfectly lawful process called business cash flow.

No need to get personal, or overly simplistic.  

it a fact that the person appeared not to understand the concept or perhaps the question.
no need to be a snowflake about basic facts :-)

Snowflake!! Moi??? 😂 🤣😂 🤣😂 🤣😂 🤣 Oh, come on.

lisyloo

devondiver said:

lisyloo said:

agentcain said:

QrizB said:

devondiver said:

... 'the funds' (which do exist) ...

Evidence, please, that the funds do exist?

Bank transfer statements minus energy bills.
If the net result is positive, they exist unless someone consumed them unlawfully.

You don’t really understand how businesses and cash flow works do you.
you don’t have an individual physical piggy bank at the supplier.
cash flow means your money would have been (lawfully) used to pay other bills.
this is a perfectly lawful process called business cash flow.

No need to get personal, or overly simplistic.  

Okay, I need to consider the snowflakes in this day and age, but I would seriously suggest you also consider whether it’s wise to make potentially libellous statements about unlawful activity in this day and age.

bagand96

devondiver said:

bagand96 said:

You are right in your understanding of the industry levy and how Ofgem protects customer credit balances.  British Gas will come to an arrangement with Ofgem on what they can claim to cover the costs of PFP SoLR.  Ofgem then pass this cost onto the industry (i.e. all other suppliers) which of course means the consumers will pay eventually.

So the over-riding question remains:

What pressures currently exist to motivate Administrators/British Gas/Ofgem/Whoever to assign customer credit balances sooner rather than later?

 - And if the answer is, at it appears to be, 'little or none' then what pressures can be brought to bear which might improve this situation, when and by whom?

The fact remains that the longer that 'they' can continue to withhold repayments the longer 'they' benefit from holding 'the funds' (which do exist) and the greater the cost to 'us'.

We are going round in circles here but seeing as you asked my I will answer again even though they are rhetorical questions.

- There isn't any pressure from anywhere.  The company are in administration which is a very different situation to a trading company.   The Administrators have objectives which are laid down in statute.  It would be very hard for anyone to force them to do anything which may contradict those.  PFP ceased to be a regulated energy provider the moment Administration was announced/

- No idea?  Write to your MP maybe if you feel it's worth your time and effort.

- We could argue the semantics of whether the money exists or not, but our Final PFP bills will likely have arrived before we're finished! @QrizB gives a good summary of the situation.  Of course there's money in BG accounts, but we have no right to it until they have formal notification of the credit amounts from PFP.  And that's back to the start of the circle.