How can so many Energy Companies Fail?- who's next? AVRO? IGLOO? SYMBIO? COLORADO? NEON REEF?

Londoner_1

ihatetrump said:

Dig a little deeper into Avro accounts and you'll see that in 2019 they paid £2.25m to Sentido Marketing Limited for Management Services (just another way of syphoning cash) - Sentido is owned by Jake Brown et al - and yes if you then look at the Sentido Accounts - there's this little note about Directors Loans:




When the Administrators/Liquidators are finally appointed, they should have a field day!

danlightbulb said:

niktheguru said:

The fact of the matter is the public are going to have to suck it up and realise that prices are going to rise. If your cheap fix with cheap company fails, then unfortunately you're going to end up on a tariff at current high prices. Its a shame and it sucks, but theres no point in whinging about it.

The big 6 are most definitely trying to work out a deal with government to fund the huge influx of customers from failed companies. Looks like the government are dragging their heels though. They were quite keen to give their mates multimillion pound PPE contracts, but not so keen on trying to support or reform the energy sector.

You're right, prices will rise, but that doesn't mean people shouldn't be vocal about it. Can't blame people for picking the cheapest switching deals. This situation is a massive failure of policy at the national wholesale and regulatory level.

Theres more:

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 provide the financial information requested by Ofgem is a breach of Avro Energy’s licence conditions, which all suppliers in the market have signed up to.

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. (1)

Notes

1. The obligation to provide information under this licence condition is enforceable by the Authority (Ofgem) as a relevant condition for the purposes of section 25 of the Electricity Act 1989 and section 28 of the Gas Act 1986. If the Authority considers that a licensee has contravened (and continues to contravene) a licence obligation, it may take enforcement action.

 

For media, contact 

Stephen Roberts: 020 7901 7460 / 07990 139516 stephen.roberts@ofgem.gov.uk 

Media out of hours mobile: 0792 882 9894 (media calls only) 

badmemory

What is really worrying is that I am sure the only way the government will consider intervening is if one of the big 6 is going under.  So why are they considering intervening?

Robin9

[Deleted User] said:

I bet that you are glad that you have got that off your chest. We could always go back to Nationalised energy suppliers with two tariffs: one for electricity and another for gas.

PS. There is no cost to Government of energy supplier failures. HMRC and Ofgem get first dibs on the supplier’s assets and consumers end up paying for any costs levied by the SoLR.

Now the electric price is effectively governed by the price of gas. Going back to the 1980's there used to be regular adjustments due to the price of coal.

Nebulous2

Camorra said:

The bottom line with all these pseudo energy companies is that they get their supply from British Gas/Centrica and charge their customers slightly less (almost negligible in some cases) in return for less profit than British Gas/Centrica. For the sake of a few hundred pounds per year or less, what was the point of switching to flaky energy suppliers like Avro & competitors? Most people spend more in interest/charges on their mobile phone contracts / contract hire cars / cable tv, as part of this subscription based 'buy now pay later' society, then they will ever save by switching energy supplier.

I think you greatly underestimate people's need / desire for 'a few hundred pounds a year.'  

Have a wander around this forum.

You'll find many people holding on by their fingertips, for whom a few hundred pounds is crucial to their budgeting. 

You'll find many more people for whom moneysaving has become a passion and a way of life. There are hundreds of people switching bank accounts for just over £100 (including me) There are people regularly shuffling hundreds or thousands of pounds from bank account to bank account for a fiver a month, or a few cinema tickets a year. 

In that context 'a few hundred pounds' feels like a big prize. 

jackieblack

Camorra said:

Most people spend more in interest/charges on their mobile phone contracts / contract hire cars / cable tv, as part of this subscription based 'buy now pay later' society, then they will ever save by switching energy supplier.

You really shouldn’t assume what most other people’s circumstances are.

pearl123

Camorra said:

 For the sake of a few hundred pounds per year or less, what was the point of switching to flaky energy suppliers like Avro & competitors? Most people spend more in interest/charges on their mobile phone contracts / contract hire cars / cable tv, as part of this subscription based 'buy now pay later' society, then they will ever save by switching energy supplier.

"Up to 14.5 million people were in poverty before the pandemic, the Government estimates, when taking housing costs into account. With the UK population currently at nearly 67 million, that’s one in every four or five people. But another 700,000 people were plunged into hardship during the pandemic, the Legatum Institute said, taking the poverty figure to more than 15 million".(https://www.bigissue.com/news/social-justice/uk-poverty-the-facts-figures-and-effects/) 21/09/2021

ihatetrump

While the comments regarding switching and poverty are well founded, we're talking here about how these start-up energy Companies were created by opportunistic individuals, many of whom were just looking tr fund their own wealth quickly, where they didn't put their own wealth into the company (AVRO - £100 share capital) and yet have milked their companies for everything they could take out - they certainly won't be in fuel poverty this winter.

The real crime here is that the lack of financial regulation in the sector - supply may have been regulated, but not the finances. The taxpayer and the energy consumer will eventually pay the full price for this failure.

roddydogs

Were going to keep the price cap, but no taxpayers money will be used, totally incompatible !

[Deleted User]

roddydogs said:

Were going to keep the price cap, but no taxpayers money will be used, totally incompatible !

I agree. Do nothing is in this Government’s mantra. The only thing that one can say with certainty is that next April’s Cap increase is going to be significant as Caps are based on costs looking back, not prices looking forward. 

Keep_pedalling

roddydogs said:

Were going to keep the price cap, but no taxpayers money will be used, totally incompatible !

Not if they simply increase the price cap.