The energy crisis deepens as Orbit and Entice go broke amid rising wholesale costs and criticism of the price cap
Thursday November 25, 2021 5:11 PM
Two other energy companies fell victim to the worsening price crisis yesterday.
Orbit Energy (Orbit) and Entice Energy (Entice) have ceased trading in the latest dire chapter for the UK energy market.
Rising wholesale costs have caused over 20 energy companies to collapse since September.
The decline in both providers means 70,000 more domestic customers will be let down this winter.
Approximately 65,000 Orbit customers and 5,400 Entice customers are now to be rescued by Ofgem’s last resort suppliers.
Under Ofgem’s safety net, domestic consumers will continue to be powered while funds already deposited into accounts are protected.
Neil Lawrence, director of retail at Ofgem, said customers “don’t have to worry” and the regulator will make sure the energy supply continues.
He said: “You can rely on your energy supply as normal. We will inform you when we have selected a new provider who will then contact you regarding your tariff. ”
So far, four million customers across the UK have been hit by the collapse of energy companies.
Energy crisis: government provides 1.7 billion
Orbit criticized the government and Ofgem for imposing unfair market conditions on the company, describing itself as a “well-run energy company”.
The company said: “Unfortunately, the UK government and our regulator, Ofgem, expect us to sell energy at a much lower price than it costs to buy – which makes it unsustainable to operate. With a heavy heart, we confirm to you, our loyal customers, that we can tell you that despite our best efforts, the energy supply of British households is no longer profitable. “
That outlook echoed statements made by doomed company Bulb Energy (Bulb), the UK’s seventh largest energy company, which fell into special administration and de facto nationalization earlier this week.
Bulb revealed that the price cap of £ 1,277 per year capped customer charges to 70p per spa, even though it cost the ailing utility company £ 4 per spa to supply customers.
This means that the energy price cap has severely restricted companies’ ability to pass the skyrocketing costs on to consumers – and has painfully suspended them.
The government will now provide Bulb and its administrators to Teneo with £ 1.7 billion of public funding over the next six months until a buyer is found for the company and its 1.7 million customers.
Industry leaders like Keith Anderson, CEO of Scottish Power, and Bill Bullen, founder of Utilita Energy, have both called for price cap reform, while Utility Warehouse called the situation chaos in its latest earnings update.
Even the price cap architect, John Penrose MP, has pushed for it to be overhauled.
He said the pricing measure was “a total failure” and the “wrong type of price cap”.
Ofgem has committed to reviewing the price cap amid industry criticism, with results from the review slated for February 2022.
Meanwhile the government said City AM. on the Monday after the fall of Bulb in disgrace that they stick to the price cap.
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