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

[Deleted User]

Keep_pedalling said:

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.

The Business Secretary has told Parliament, and repeated it again today on Radio 4, that the present Cap will stay. Suppliers are losing money for each customer that they have on the Cap which they will seek to recover next April in the form of a higher Cap. Any Cap revision will also include SoLR costs and the cost of protected consumer credits as I cannot see any of the Big 6 willingly taking on millions of customers. They will have to be appointed as SoLRs which comes at a much higher cost than a voluntary takeover. 

QrizB

Dolor said:

Keep_pedalling said:

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.

The Business Secretary has told Parliament, and repeated it again today on Radio 4, that the present Cap will stay. Suppliers are losing money for each customer that they have on the Cap which they will seek to recover next April in the form of a higher Cap. Any Cap revision will also include SoLR costs and the cost of protected consumer credits as I cannot see any of the Big 6 willingly taking on millions of customers. They will have to be appointed as SoLRs which comes at a much higher cost than a voluntary takeover. 

... and we all expect most of the biggest suppliers to make it through the winter to April without going bust, even if it needs the Gov't to underwrite their lending.

CalvinHobs

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.

Not me. I do not have a mobile phone nor a car and I only have terrestrial TV. I do have credit cards but the bills are paid in full by direct debit every month. No mortgage and no loans so I am completely free of debt.

In Summer 2020, I looked at the MSE table of energy suppliers and switched to Avro - as they were offering a decent fixed-rate tariff and had a good customer rating. I paid £960 over one year which saved me about £300 compared to what I would have paid with my previous supplier.

So are you saying I should not have switched to Avro but just written off £300 for the privilege of staying with a bigger supplier? Okay...

Btw, I am currently £37 in credit with Avro but have already used more gas + electric than that this month - so I am fairly relaxed about the prospect of Avro going under. I will be moved to another supplier and then have to shop around for a better tariff. Not a big deal; worse things are happening in the world.

ihatetrump

The big question for so many will be:

1. Do I sit and wait for my supplier to go bust, get transferred, most likely to a Big 6 supplier and then search around for a new deal or

2. Switch now and lock in to a better tariff (most likely fixed) to get some security.

I chose option 2 and having switched at the weekend to an EDF 3 Year fix (from Igloo) - now costs me £30 per month more, but today EDF are quoting £10 per month extra again for the same tariff. At least I have 3 years of certainty - on the basis that EDF should be able to survive the current turmoil in the market - The same I'm sure cannot be said of so many of the smaller suppliers.

ihatetrump

For those who want to see details of the Provisional Order made by OFGEM to AVRO Energy, here it is:

https://www.ofgem.gov.uk/publications/avro-energy-limited-provisional-order

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. 

It is those financial projections that OFGEM is wanting to see that allowed AVRO to avoid having the auditors opinion on their 2019 accounts from being qualified - a beancounter term  

It then brings into question whether they (AVRO) have been trading illegally for the last 2+ years. Directors who knowingly allow an insolvent company to continue trading are committing a criminal act - but then Jake Brown (27 year old CEO of AVRO) studied law, so he should know that! - and they (the Directors) can be held personally liable for debts owed to creditors - at £45M for advance customer deposits, that's one hell of a debt Jake!

2Sheds

I have credit of about £300 with Avro I might as well turn the heat on now rahter than hang on until Oct !!

Did email asking for £200 back but not holding my breath

Q. Since I'm in credit by about 3 months payments can I just cancel the DD for a couple of months if they don't refund (thats if they survive the week)

ihatetrump

Earlier in the post in mentioned AVRO's association with Dyball Associates.

Dyball setup Colorado Energy although they appear to have exited that company in May of 2020 when it was acquired by Mr Mooktakim Ahmed & Olatunde Alegbe.

Colorado has never filed any trading financial statements with Companies House and has changed it's year-end 3 times in what would appear to be a deliberate attempt to circumvent statutory filing requirements - there's therefore no indication of how big or small this supplier is.

It looks like OFGEM may have finally caught up with them yesterday when they failed to pay £261k as per the following statement from OFGEM:

Ofgem is issuing suppliers Colorado Energy, Igloo Energy Supply Limited, Neon Reef Limited, Whoop Energy Limited and Symbio Energy with provisional orders, compelling them to pay around £765,000 in total for a government environmental scheme.

The Feed In Tariff (FIT) scheme, which is administered by Ofgem, provides payments to owners of small-scale renewable energy generators, and is paid for by suppliers.

Any supplier that fails to pay its Year 11 FIT levelisation obligation by the deadline of 17 September 2021 is in breach of the rules of its supply licence.

The five suppliers each failed to make their payments by the due date. Colorado Energy failed to pay £261,406.12, Igloo failed to pay £316,582.44, Neon Reef Limited failed to pay £37,350.76, Symbio Energy failed to pay £146,238.66 and Whoop Energy limited failed to pay £3,780.22. This will delay the distribution of this money to generators and other suppliers.  

Surprising to see Igloo on this list also (the supplier I switched away from only 5 days ago but who took my last DD only this morning).

If this list is anything to go by, there appears to a whole stack of cards about to tumble.......

wakeupalarm

"Ordinary people are going to pay the price in rising costs and fuel poverty while these directors apparently get to walk away wealthy."

https://www.thelondoneconomic.com/business-economics/business/bandit-capitalism-bosses-of-failed-energy-suppliers-pay-benefits-revealed-291522/

CalvinHobs

ihatetrump said:

So, lets get this right, the company losses of £27 Million are being sustained only through the £46 Million of advance customer payments - CUSTOMER CREDIT BALANCES!

I don't know why but Signor Charles Ponzi comes to mind.

I'm not suggesting Avro is a Ponzi scheme as they are not paying out to investors - only to themselves. So that's alright then.

ihatetrump

It's not far off a Ponzi scheme though.

Any business model that funds itself by effectively borrowing money from its' customers to pay it's suppliers is not a viable model - certainly not so if it has negative operating margins - a £27M accumulated loss funded by customers - not by investors (they only put £100 in) or by any banks (who have put nothing in).

AVRO's failure to comply with OFGEM's request for financial information is alarming.

They have 6 days remaining to file audited accounts that themselves will be 15 months old - I wonder if they are struggling with their auditors? - who are maybe now just checking their own professional indemnity insurance policies.