Extra Energy, an energy supplier with about 108,000 domestic and 21,000 business customers, has ceased trading. It becomes the sixth energy company to cease trading this year.
The other suppliers to cease trading this year were:
- Future Energy ( January)
- National Gas and Power (July)
- Iresa (July)
- Gen4U (September)
- Usio Energy (October)
Under Ofgem’s safety net, the energy supply of Extra Energy’s customers will continue as normal. The outstanding credit balances of domestic customers will be protected. Ofgem will choose a new supplier to take on Extra Energy’s customers as quickly as possible. This supplier will contact these customers shortly after being appointed.
Ofgem’s advice to Extra Energy’s customers in the meantime is:
- Do not switch to another energy supplier.
- Take a meter reading, ready for when your new supplier contacts you.
This will make the process of transferring customers over to the chosen supplier, and paying back any outstanding credit balances, as smooth as possible.
Philippa Pickford, Ofgem’s interim director for future retail markets, said: “If you are an Extra Energy customer, under our safety net, we will make sure your energy supplies are secure. We will also ensure that domestic customers’ credit balances are protected.”
“Ofgem will now choose a new supplier and ensure you get the best deal possible. Whilst we’re doing this our advice is to ‘sit tight’ and don’t switch. You can continue to rely on your energy supply as normal. We will update you when we have chosen a new supplier who will then get in touch about your new tariff.”
Gillian Guy, Chief Executive of Citizens Advice, said “Today’s news and other recent supplier failures again highlight how essential it is that suppliers operating in the market have sustainable business models.”
Peter Earl, Head of Energy at comparethemarket.com, said: “It’s pretty shocking that a company of Extra Energy’s size and scale could collapse so suddenly. It is great that Ofgem is taking swift action to protect those customers impacted, but it is vital that it starts testing existing energy companies on the viability, and sustainability, of their business as soon as possible and ideally any new ones before they enter the market. It may be that some of the smaller ‘challenger’ energy providers are taking on too many customers on loss-leading fixed tariffs and then are not able to cope with changes in the wholesale price of gas and electricity and the subsequent loss of customers once they are out of their fixed tariff period. Ofgem needs to test that energy companies are not just there for a quick buck but for the long-term so that a hundred thousand customers are not left in the lurch again as they have been in this instance.”