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DiseasedBunny

BBC news: expecting another 4 companies to fold next week 

https://www.bbc.co.uk/news/business-58610561

razord

BBC say 4 more small suppliers could go bust next week, and are seeking bidders for their customers. Is this essentially them trying to organise a SoLR themselves before it becomes OFGEM's job?

https://www.bbc.co.uk/news/business-58610561

[Deleted User]

razord said:

BBC say 4 more small suppliers could go bust next week, and are seeking bidders for their customers. Is this essentially them trying to organise a SoLR themselves before it becomes OFGEM's job?

https://www.bbc.co.uk/news/business-58610561

 If they can sell the business then it is better for all concerned, but I would be surprised if there are many suppliers out there at the moment that want to honour existing fixed tariffs.

tghe-retford

Swipe said:

tghe-retford said:

Swipe said:

If entered into a fixed rate contract it's legally binding. Absolutely nothing Ofgem can do to change that.

One that I can exit (in many cases after paying a fee and giving notice) for any reason but the supplier cannot in extraordinary circumstances. Not viable.

The exit fee forms part of the contract. I see nothing about the suppliers having an exit clause.

Energy is the only industry I can see with this in place. I was with Three when they implemented a new strategy to increase their profitability by giving all of their One Plan customers an ultimatum - pay double the price for what you get now or be given your PAC code and you become another telecom providers problem. Turned out to be successful enough that other companies followed suit.

Although I was with Toto Energy when they decided that I was too much of a loss making customer so I was moved to Utilia wherever I wanted it or not. Though I was on a variable tariff at the time which probably made it easier. So it can happen. Thirty days notice to end a contract (without penalty) or be moved to another tariff or supplier, could be easy for the industry to ask Ofgem and Kwasi Kwarteng tomorrow when the emergency meeting with suppliers is due to happen, alongside an ask to abolish the cap. The alternative is a bigger collapse of suppliers in the industry within the coming weeks and months. There's already suggestions of a collapse which could see the big six and not many more minor suppliers left by the end of all this. With all the consequences a small clique of firms brings to consumers that will come as a result.

Why is energy an exception when in any other industry, loss making consumers would be given thirty days notice and have their contracts null and voided to prevent companies making losses that threaten their business and jobs?

QrizB

tghe-retford said:

Why is energy an exception when in any other industry, loss making consumers would be given thirty days notice and have their contracts null and voided to prevent companies making losses that threaten their business and jobs?

You don't seem to understand how contract law works.

tghe-retford

QrizB said:

tghe-retford said:

Why is energy an exception when in any other industry, loss making consumers would be given thirty days notice and have their contracts null and voided to prevent companies making losses that threaten their business and jobs?

You don't seem to understand how contract law works.

The Times (behind a paywall) and the Daily Mail is reporting that the Government is considering making energy companies be allowed to take over the supplies of failing companies. That WILL have to involve changes to what customers tariffs are on in order to make that viable as a solution. Regardless, it's Government and they can amend or repeal the law.

https://www.dailymail.co.uk/news/article-10007017/Call-axe-green-levy-amid-fuel-crisis-fears-Power-chiefs-demand-help-customers.html

I know it's fashionable at the moment to claim "misinformation" and "fake news" whenever someone makes a suggestion that is uncomfortable and that opponents in a debate should be censored. But the truth of the matter is that the Government is considering that as a plan to save energy firms and no amount of public reputation destroying is going to change what is increasingly likely to become reality - that customers are likely to see their fixed deals end early outside of SoLR if the media is correct.

I'm not saying it's right or it will happen, but it appears to be a line that the Government is considering, as I warned, not advocated for.

QrizB

tghe-retford said:

QrizB said:

tghe-retford said:

Why is energy an exception when in any other industry, loss making consumers would be given thirty days notice and have their contracts null and voided to prevent companies making losses that threaten their business and jobs?

You don't seem to understand how contract law works.

... it's Government and they can amend or repeal the law.

You've moved the goalposts from "Ofgem will allow it" to "Government will legislate for it".

There's nothing in that Daily Mail article to suggest that Government intends to permit your core claim that some deus ex machina will allow companies to unilaterally terminate contracts. Quite the opposite, in fact; all the recent articles, including that one, suggest that government is quite happy for energy suppliers to fail so long as the supply of energy to consumers is preserved.

tghe-retford

QrizB said:

tghe-retford said:

QrizB said:

tghe-retford said:

Why is energy an exception when in any other industry, loss making consumers would be given thirty days notice and have their contracts null and voided to prevent companies making losses that threaten their business and jobs?

You don't seem to understand how contract law works.

... it's Government and they can amend or repeal the law.

You've moved the goalposts from "Ofgem will allow it" to "Government will legislate for it".

There's nothing in that Daily Mail article to suggest that Government intends to permit your core claim that some deus ex machina will allow companies to unilaterally terminate contracts. Quite the opposite, in fact; all the recent articles, including that one, suggest that government is quite happy for energy suppliers to fail so long as the supply of energy to consumers is preserved.

The SoLR mechanism is not going to work with all the companies expected to fail. Something has to be done before then. Sitting back and doing nothing won't be an option as time goes on unless you want the complete eradication of a whole swathe of the industry. A harsh, bitter pill regarding UK energy is coming and dismissing those who warned about it as misinformation peddlers won't stop it.

Wilt

The govt, as reported in a number of news outlets, have explicitly said they do not want to reward failing suppliers which is exactly what doing as you suggested, legislating to allow ending of fixed term tariffs unilaterally, would do - a supplier that had made promises that they were never going to be able to keep would be able to continue trading as normal, and profit from being badly run.

Your point wasn't that the government would introduce an alternative way of managing insolvent suppliers than the SoLR mechanism, but that suppliers would be able to end fixed term tariffs early. 

If you would like to modify your original point to the government are going to have to come up with an alternative supplier insolvency method, which will likely mean that fixed term tariffs of failed suppliers will end early as it already does under the existing SoLR arrangements, to manage the large numbers of suppliers that are likely to go bust in the coming weeks/months, then we are in agreement.

But your original suggestion that operating suppliers would be able to unilaterally end fixed term tariffs to stay afloat doesn't align with what is being reported at the moment.

MattMattMattUK

spot1034 said:

If they don't want to give quotes to individuals, what will their response be if asked to act as SOLR after the collapse of a failed small supplier?

None of them currently want to be SOLR as they will get stung for the credit balances. The government is likely to have to step in and pay the suppliers to take on these new clients as well as agree that they can me moved onto the new supplier's tariffs rather than transferring over the old one.