Ofgem orders Avro Energy to provide financial information

greenguppie

"Ofgem is issuing Avro Energy with a provisional order, which compels it to provide the regulator with financial and other information relating to the company’s activities.

Ofgem requested the financial information on 19 August.

Avro Energy is now required to immediately provide this information and we expect them to engage in constructive discussions about their financial projections."

"Failure to comply may result in further enforcement action being taken by the regulator which could include a fine, or Avro Energy being stripped of its licence to operate in the GB market."

Source and full details: https://www.ofgem.gov.uk/publications/ofgem-orders-avro-energy-provide-financial-information

greenguppie

The Provisional Order can be found here:
https://www.ofgem.gov.uk/publications/avro-energy-limited-provisional-order

Verdigris

That'd be a hard one for a SoLR to swallow, especially if they have to buy huge amounts of energy on the spot market to be able to supply that number of customers.

[Deleted User]

Verdigris said:

That'd be a hard one for a SoLR to swallow, especially if they have to buy huge amounts of energy on the spot market to be able to supply that number of customers.

Ofgem can require any supplier to act as a SoLR. We can all take comfort from the fact that a claim will be lodged against Ofgem for every penny that is spent by the appointed SoLR in meeting this legal obligation. 

barker77

For those on avro, stay or transfer ASAP?!

Verdigris

Leaving may just put you in a frying pan/fire situation. Given the size of Avro, I would imagine Ofgem would be reluctant to wind them up, particularly in the present storm. If you've got a half-decent fix, you are not going to find anything better, so you might as well let things take their course. If you've got a large credit balance  it would be a good idea to reduce that.

greenguppie

Verdigris said:

That'd be a hard one for a SoLR to swallow, especially if they have to buy huge amounts of energy on the spot market to be able to supply that number of customers.

I think Avro only currently have about 40,000 customers (but most are on dual fuel)
That's small fry in comparison to recent failures such as Utilty Point and Peoples Energy

Dolor said:

Ofgem can require any supplier to act as a SoLR. We can all take comfort from the fact that a claim will be lodged against Ofgem for every penny that is spent by the appointed SoLR in meeting this legal obligation. 

How do you know that? That a claim will be lodged for every penny that is spent?

For someone like BG with their 10 million existing customers, I suspect BG could swallow 40,000 additional customers with hardly a ripple to their current overall energy provison projections.

Verdigris

Avro have about 2% market share, same as Utility Warehouse. More like 400,000 customers.

greenguppie

Verdigris said:

Avro have about 2% market share, same as Utility Warehouse. More like 400,000 customers.

Oops! Looks like my friend, Mr Google, was wrong this time.
Although it was said to be a 2021 figure I was using, further digging shows it was actually from 5 years ago.

QrizB

greenguppie said:

Dolor said:

Ofgem can require any supplier to act as a SoLR. We can all take comfort from the fact that a claim will be lodged against Ofgem for every penny that is spent by the appointed SoLR in meeting this legal obligation. 

How do you know that? That a claim will be lodged for every penny that is spent?
For someone like BG with their 10 million existing customers, I suspect BG could swallow 40,000 additional customers with hardly a ripple to their current overall energy provison projections.

There's a legal obligation on directors of companies to maximise shareholder value. The idea that a director would instruct their business "no, don't claim those millions from Ofgem's fund, we've got plenty of money" is absurd.

Not least as that director would find themselves being repriamanded by their own shareholders, who set the director's remuneration.

MWT

greenguppie said:

How do you know that? That a claim will be lodged for every penny that is spent?

For someone like BG with their 10 million existing customers, I suspect BG could swallow 40,000 additional customers with hardly a ripple to their current overall energy provison projections.

I think that was said in the context of a forced appointment of a SoLR.

When the energy companies are bidding against each other for the spoils they tend to offer to absorb the costs, but if they have had a problem they didn't want, dumped on them, then there is little reason not to claim everything they can...