UK Edition
The energy regulator is facing “serious questions” over its handling of the domestic supply market after two more firms collapsed.
Ofgem said that Entice Energy, which supplies around 5,400 households, and Orbit Energy, which supplies another 65,000, had ceased to trade on Thursday as a crisis gripping the industry continued to gather pace.
Their customers will be passed on to other suppliers through a safety net mechanism and put on new tariffs, but their credit balances will be protected.
Their collapse takes the number of failed suppliers to 25 since gas prices began to surge in August.
It also came just hours after the regulator placed Bulb, Britain’s seventh-biggest supplier, into so-called special administration, in an unprecedented step that effectively nationalised the energy firm.
Citizens Advice said the latest failures called Ofgem’s approach to regulating the market into question.
Gillian Cooper, the consumer watchdog’s head of energy policy, said: “The increases in global gas prices we’ve seen this year have been significant, but should not have led to the collapse of 25 firms.
“As suppliers continue to fall like dominoes, it’s clear the market is not functioning as it should and there are serious questions for Ofgem to answer about how this has been allowed to happen.”
Bulb, which had 1.7m customers, went bust with just £8.5m in the bank after finding itself unable to pay its huge debts in the wake of surging wholesale energy prices.
The company has become the largest victim of the jump in power costs, which suppliers are unable to pass on to their customers in full because bills are capped at £1,277 for the average household.
In a letter to its customers, Orbit also blamed the price cap for its troubles.
The firm claimed it had been “well-run” and took a “prudent approach” before adding: “Sadly the UK Government and our regulator Ofgem expects us to sell energy at a price far lower than the cost to buy – which makes operating unsustainable.”
Neil Lawrence, director of retail at Ofgem, said the regulator’s “number one priority is to protect customers”.