Major update for 15,300 customers with collapsed energy supplier as new provider takes over
A MAJOR update has been issued just days after an energy supplier collapsed under huge debts and a £1.5million fine.
Tomato Energy, which served 15,300 households and 8,400 businesses, confirmed that it was formally ceasing to trade last week.
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Ofgem said Tomato Energy was not keeping enough cash in reserve and warned its financial troubles could lead to higher bills for existing customersCredit: Refer to source
It came after the supplier, which was banned from taking on new customers in April after racking up £3million in debt, filed an intention to appoint administrators at the end of October.
Ofgem was quick to reassure customers that, even though the supplier had gone bust, their energy would not be cut off.
It added on Wednesday that it was working quickly to appoint a new supplier for all existing customers, and that they should not switch in the meantime.
Ofgem has today appointed British Gas to supply Tomato Energy’s domestic and non‑domestic customers after a “competitive process”.
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It said funds that current and former domestic customers of the supplier have paid into their accounts will be protected, where they are in credit.
Domestic customers will also be protected by the energy price cap with their new supplier.
For existing Tomato Energy customers, energy supplies will continue as normal after they were switched over.
Customers of Tomato Energy will be contacted over the coming days about the changes.
If customers wish to switch supplier, they can shop around but are advised to wait until the transfer has been completed.
Customers will not be charged exit fees if they decide to switch to another supplier.
Rohan Churm, director for financial resilience and controls at Ofgem, said: “Minimising the disruption to customers is our top priority when a supplier exits the market, so I am pleased to confirm British Gas has been appointed to take on customers of Tomato Energy, and will work to move their accounts in the coming days and weeks.
“While I know customers may be concerned, they do not need to worry – any domestic credit balances are protected and there will be no interruption to their supply during this period.
“Tomato Energy customers will be placed onto a competitive tariff, and when the switch is complete they can consider what’s right for them and can shop around for other deals.
“They will also face no exit fees if they choose to switch to another supplier.”
Ofgem’s Supplier of Last Resort scheme has already moved hundreds of thousands of customers from failed energy firms to new suppliers.
In April, when Rebel Energy went out of business, Ofgem made sure its 80,000 customers weren’t left without electricity or gas.
The regulator quickly switched everyone over to British Gas, so no one lost their supply.
Smaller energy companies can often offer cheaper deals than the Big Six, but they’re also more likely to go out of business.
At the height of the energy crisis, 30 firms collapsed in less than a year, leaving over two million households needing new suppliers.
Names like Bulb, Zog Energy, Together Energy and Orbit were among those that went under.
To prevent this happening again, Ofgem now requires all energy suppliers to keep a financial safety buffer, so they’re better prepared for tough times.
Fewer companies have collapsed since these new rules were introduced.
Is it safe to switch to a small energy supplier?
FED up with high energy bills and poor service from the Big Six suppliers?
You could save up to £333 a year by switching to one of the smaller firms, which customers rate much more highly, according to Which?.
The main risk with a smaller supplier is that it might go out of business.
But if this happens, you won’t lose your supply – Ofgem will quickly move you to a new company and your account credit will be safe.
You don’t have to stay with the new supplier or accept their prices—you can shop around for a better deal at any time, without paying any exit fees.
What’s happened at Tomato Energy?
In April, energy regulator Ofgem banned Tomato Energy from signing up new customers after the firm built up £3million in unpaid debts and ran out of money.
Ofgem said Tomato Energy was not keeping enough cash in reserve and warned its financial troubles could lead to higher bills for existing customers.
Since then, Tomato Energy failed to fix these problems and now faces losing its licence.
On 13 October, Ofgem said Tomato Energy could face a £1.5 million fine for breaking the financial rules needed to run an energy company.
At the time, Ofgem would not comment on the firm’s finances.
The Sun then revealed Tomato had filed a notice of intention to appoint administrators in early October.
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That notice usually gives a company 10 days to find a rescue before it goes bust.
However, Tomato could not be saved and it has now chosen to cease trading.
What energy bill help is available?
There’s a number of different ways to get help paying your energy bills if you’re struggling to get by.
If you fall into debt, you can always approach your supplier to see if they can put you on a repayment plan before putting you on a prepayment meter.
This involves paying off what you owe in instalments over a set period.
If your supplier offers you a repayment plan you don’t think you can afford, speak to them again to see if you can negotiate a better deal.
Several energy firms have schemes available to customers struggling to cover their bills.
But eligibility criteria vary depending on the supplier and the amount you can get depends on your financial circumstances.
For example, British Gas or Scottish Gas customers struggling to pay their energy bills can get grants worth up to £2,000.
British Gas also offers help via its British Gas Energy Trust and Individuals Family Fund.
You don’t need to be a British Gas customer to apply for the second fund.
EDF, E.ON, Octopus Energy and Scottish Power all offer grants to struggling customers too.
Thousands of vulnerable households are missing out on extra help and protections by not signing up to the Priority Services Register (PSR).
The service helps support vulnerable households, such as those who are elderly or ill.
Some of the perks include being given advance warning of blackouts, free gas safety checks and extra support if you’re struggling.
Get in touch with your energy firm to see if you can apply.
