Energy suppliers going bust

Dave Herbal

Striker
I’ve just had an email to say my energy supplier, People’s Energy, has gone bust, along with 4 other suppliers this week alone. Looks like the reselling bubble has burst.
 


The Truth

Midfield
The profit margin for the smaller energy suppliers is miniscule while the financial commitments required by Ofgem in order to retain a supply license are substantial. I don't know why any sane person would go into the energy supply business unless they were able to produce energy too
 

PTR

Striker
I think the recent rise in gas prices hasn't helped them.

Good thing is that these companies going bust doesn't significantly impact the customers.
 

The Truth

Midfield
Always found it hard to get my head around really. All these suppliers are essentially supplying nowt. Just buying it off somebody else then selling it on for profit.
It's (usually) the variability in supply and demand that causes financial problems so their calculations of how much energy they need to buy for a certain period needs to be as close to perfect as it can possibly be.

The best example I can give is a few years ago when the suppliers had purchased the energy they calculated they'd require one particular winter then the beast from the east hit. Hardly any suppliers had purchased enough to meet the increased demand of their customers so were forced to purchase more and, as demand was higher, the price of purchasing the energy was higher too. With the profit margins being so small that was any potential profit for small suppliers blown out of the water for the entire financial year and several companies went under because of it.
 
It's (usually) the variability in supply and demand that causes financial problems so their calculations of how much energy they need to buy for a certain period needs to be as close to perfect as it can possibly be.

The best example I can give is a few years ago when the suppliers had purchased the energy they calculated they'd require one particular winter then the beast from the east hit. Hardly any suppliers had purchased enough to meet the increased demand of their customers so were forced to purchase more and, as demand was higher, the price of purchasing the energy was higher too. With the profit margins being so small that was any potential profit for small suppliers blown out of the water for the entire financial year and several companies went under because of it.
That makes sense. A very difficult business model with the unpredictable nature of British weather.
 

Steak Pie

Striker
What happens if you are in credit and they owe you money?
Will be honoured.

We were with PFP up to this week, we've been moved to British Gas by default.

From the email from British Gas:

If you have an outstanding credit with PFP Energy this will be transferred onto your new British Gas account – in our experience this can take a while, but we’ll keep you updated along the way.
 

Kevj

Striker
I think the recent rise in gas prices hasn't helped them.

Good thing is that these companies going bust doesn't significantly impact the customers.

CF chemicals in Haverton Hill have mothballed their facility this week because of gas prices.
 
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Will e

Full Back
Will be honoured.

We were with PFP up to this week, we've been moved to British Gas by default.

From the email from British Gas:

If you have an outstanding credit with PFP Energy this will be transferred onto your new British Gas account – in our experience this can take a while, but we’ll keep you updated along the way.
Aye, same here, BG are apparently putting all PFP customers on a special deal/rate, until next April I think it was. They say it's cheaper than any comparison site ATM.
 

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