WARRINGTON Borough Council-backed Together Energy Retail Ltd has today announced it is ceasing to trade – with energy regulator Ofgem moving to protect customers.
Together Energy Retail (which includes its subsidiary, Bristol Energy) supplies around 176,000 domestic customers, and one non-domestic customer.
Under Ofgem’s safety net, customers’ energy supply will continue and funds that domestic customers have paid into their accounts will be protected, where they are in credit. Domestic customers will also be protected by the energy price cap when being switched to a new supplier.
Customers of Together Energy Retail will be contacted by their new supplier, which will be chosen by Ofgem.
Ofgem’s advice to affected customers in the meantime is to:
Wait until a new supplier has been appointed and you have been contacted by them in the following weeks before looking to switch to another energy supplier.
Take a meter reading ready for when your new supplier contacts you.
This will make the process of transferring customers over to the chosen supplier and honouring any funds that domestic customers have paid into their accounts, where they are in credit, as smooth as possible.
In recent weeks there has been an unprecedented increase in global gas prices which is putting financial pressure on suppliers. Ofgem is working closely with government and industry to make sure customers continue to be protected this winter.
Neil Lawrence, Director of Retail at Ofgem, said: “Ofgem’s number one priority is to protect customers. We know this is a worrying time for many people and news of a supplier going out of business can be unsettling.
“I want to reassure affected customers that they do not need to worry, under our safety net we’ll make sure your energy supplies continue. Ofgem will choose a new supplier for you and while we are doing this our advice is to wait until we appoint a new supplier and do not switch in the meantime. You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your tariff.
“Any customer concerned about paying their energy bill should contact their supplier to access the range of support that is available.”
Updates are available from our website or through our twitter feed @ofgem.
Customers who have questions should visit the FAQs on our website. Alternatively, if customers need additional support in England and Wales, they can call Citizens Advice on 0808 223 1133 or email them via their webform. In Scotland, they can contact Advice Direct Scotland on 0808 196 8660 or email them via their webform.
Warrington Borough Council has a 50 percent stake in the business following an original £18m investment and a recently increased £20M revolving credit facility and the Orsted guarantee now reported at £14m.
The company has been reported to be on the brink of collapse since it was unable to pay Renewables Obligations of more than £12m to Ofgem which has been outstanding since the autumn. Following negotiations the bill was due to be paid later this month. It is now likely to be in the list of creditors, including the council.
UPDATED: Liberal Democrat Finance Spokesperson, Cllr Ian Marks said, “Liberal Democrats supported the attempt by the Council to work with Together Energy to try and find a way of preventing the company from going into administration by attracting new funding. This was a forlorn hope in the current energy market but had to be tried. On many occasions we have stated that we support the Council in most of their commercial investments to generate income to meet the shortfall caused by central government cuts.
“Regeneration in the town, solar farms and housing are risks worth taking. However I say again, that right from the start we have opposed the investments in Together Energy and Redwood Bank. They were too risky and Councils have no expertise in such businesses. Sadly the collapse of Together Energy and the downgrade in the valuation of the Bank shows we were right. The investment in the HUT Group is also questionable. It is worth reminding the Labour Council that the men behind the Bank and HUT are both major donors to the Conservative Party.
“We question why the Government has not made it clearer about what kind of investments are legal and justified. We live in a strange world where a Council is allowed to borrow money cheaply and then invest it in commercial ventures in totally different businesses to make a profit. The Conservatives complain about the Council’s high level of debt but we don’t hear them complaining about the record levels of debt incurred by their government. Local Conservatives have never told the public how they would protect vital services if there was no investment income.
“We must hope that ongoing discussions over the next few weeks between the regulator OFGEM, Together Energy and the Council will minimise the financial impact on council tax payers.”
UPDATED: Warrington South MP Andy Carter said: “Having highlighted this risky investment many times in Parliament over the last two years it was only a matter of time before the inevitable happened, I’m sorry to see that Together Energy has gone into administration and I recognise this will be a concerning time for those people who’s jobs are now immediately at risk.
“Labour Councillors simply should not have made this investment decision, the level of scrutiny needed, expertise in managing tricky energy markets and experience in commercial governance are simply not present within the council. I understand Councillors were advised not to make this investment but decided to press on in any case. Labour’s line will be to blame everyone else but it is clear this decision was taken by Labour Councillors and they must be held to account for the losses which will inevitably follow.
“They’ve known for weeks that this investment is at risk yet they’ve continued to support further loans to private companies. I call on them to halt this reckless policy and focus on delivering services to local people.
I’ve already met with the Energy Minister to try and minimise losses for people in Warrington, I understand the process of administration will take some time and I will be looking to recover as much of the £52m public money invested in this business.”
UPDATED: Deputy leader of the council Cllr. Cathy Mitchell, said: “We’re very disappointed that Together Energy will be ceasing to trade due to the current energy crisis, which has already resulted in the closure of several energy companies.
“Our vision was to be part of a company that tackles the climate emergency by delivering 100% green energy to customers, contributes to reducing fuel poverty and provides local jobs in Warrington – particularly for those out of work or without formal qualifications – but the current market conditions are sadly not sustainable.
“We know that Together Energy’s operating model was resilient and our approach to hedging extremely robust, but the enormous and sustained wholesale price rises mean that it is now one of many companies that has had to leave the market.
“We know this will be a difficult time for Together Energy customers and staff. We also know that Together Energy’s closure will have an impact on our residents. Whilst it is our absolute priority to minimise any and all exposures we have as a council, we must first, as a priority, ensure that the independent administration process completes in a timely manner, and that Together Energy’s customers are seamlessly transferred to another provider.
Unfortunate news for TE employees/customers. And disappointing news for #Warrington residents as the impact of TE's collapse on the council's finances is uncertain. The council leadership was warned of the risks of reckless borrowing for commercial investments, but didn't listen. https://t.co/96PD6OuNnZ
— Brandon McFarlane (@BMcFarlaneUK) January 18, 2022
#BREAKING Together Energy, which supplied some 178,000 domestic customers, has collapsed.
It becomes the 26th energy firm in under five months to fail.
Ofgem, the regulator, will now begin the process of transferring customers to other firms. pic.twitter.com/uWklz13YYN
— TLDR News UK (@TLDRNewsUK) January 18, 2022
CHART OF THE DAY: With the collapse today of electricity and gas retailer Together Energy, the number of UK households hit by the collapse of their energy supplier has surged above 4 million for the first time since the crisis started in August 2021.Outstanding regulatory job. pic.twitter.com/65I1gVk2CR
— Javier Blas (@JavierBlas) January 18, 2022
Fears growing council-backed Together Energy facing collapse
1 Comment
Pingback: Tories call on Labour council to halt risky investments following collapse of Together Energy – Diverse Outlook