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Business News

Energy supplier Green lines up insolvency advisers amid industry crisis

today21/09/2021

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Another of the UK’s small energy suppliers is lining up advisers to oversee its potential insolvency after ministers ruled out stepping in to prop up companies on the brink of collapse.

Sky News has learnt that Green, which serves about 250,000 customers, is working with Alvarez & Marsal (A&M) to coordinate plans to use the industry regulator Ofgem’s Supplier of Last Resort (SOLR) mechanism.

An administration of Green is possible within days, sources said on Tuesday, and is expected to be followed by many more.

Employing close to 200 people, Green chief executive Peter McGirr had warned publicly that the company would fail within three months unless it received state support.

Kwasi Kwarteng, the business secretary, was meeting smaller suppliers from across the market on Tuesday afternoon, but the prospect of any government subsidy for those companies appeared to have been ruled out.

The government is instead looking to extend state-backed loans to larger energy companies to subsidise the cost of taking on loss-making customers from rivals which become insolvent.

In the past week, businesses including Utility Point and PfP Energy have gone under, with dozens more at risk of following suit.

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Mr Kwarteng will also be questioned by MPs on the business, energy and industrial strategy committee about the energy sector crisis on Wednesday.

Green, which declined to comment, was the organiser of a letter from 15 smaller suppliers earlier this week which criticised both Mr Kwarteng and Ofgem for failing to engage with them.

Signed by executives from providers including Symbio Energy, Zebra Energy, TruPower, Whoop and Zog Energy, its backers accounted for more than one million customers and employ more than 2000 staff across Britain.

The executives accused Ofgem of adopting a “mantra of everything will be ok in the end, dumping the cost of their failings onto customers’ bills through mutualisation, decreased competition and innovation in the energy market and lack of preparation for the storm that has been brewing since the start of 2021”.

They added that Ofgem was “currently unfit to regulate an industry they have appeared to have a vested interest in or turning a blind eye to the market returning to a selective monopoly and a reduction in competition”.

The group of smaller suppliers said they felt ignored by the government, even as wholesale gas prices had surged by 70% since the announcement of the revised Ofgem price cap.

“The discussions held between The Rt Hon Kwasi Kwarteng MP and suppliers focused solely on the largest energy suppliers in the UK, who would benefit from market consolidation as a revert back to times gone by of less competition in the energy market at the detriment to the end consumer,” the letter said.

“We feel our voice, as suppliers of all different sizes, has not been heard. Yet we are all in the market together and experiencing the same conditions, if not exacerbated due to our size with access to financial support/credit lines.”

A&M declined to comment.

 Sky News

© Sky News 2021

Written by: Rother Radio News


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today21/09/2021