Other UK energy companies could collapse this week
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Four more energy companies could collapse this week and their customers transferred to higher tariffs.
The companies have reportedly already discussed with regulator Ofgem and announcements about the future of energy companies that could collapse could arrive as early as today, Wednesday, October 13.
Nine energy companies have already collapsed this month and the industry is reportedly bracing for another collapse.
The huge increase in wholesale gas prices is causing chaos for companies in the sector and companies are not allowed to pass the increased costs on to customers due to the cap on energy prices.
The government has so far refused to bail out companies threatened with collapse, but customers are protected by the “supplier of last resort” system.
This means that Ofgem will transfer customers to a new supplier and also ensure that any credit on their account is protected. Companies like E-On, EDF Energy and British Gas have taken over the majority of the 1.7 million customers since the beginning of August.
However, the bills have increased by several hundred euros as the agreements that customers had with their old supplier are no longer available.
The energy price cap rose to £ 1,309 in early October, and is expected to rise again when it is next revised in April 2022.
Avro Energy, with 580,000 customers, has been the largest supplier to go bankrupt so far, but there have been warnings that larger companies are also vulnerable.
The Mayor of London, Sadiq Khan, said yesterday that the government should support companies affected by the huge increase in gas prices.
He said many businesses are facing the “perfect storm” of growing bills as they recover from the Covid pandemic, in which many “just kept their heads above water.”
“The government has to step in and help because, in fact, if it does not step in and help, many of these companies will go bankrupt and it will be more costly for the government to contribute to the benefits of employees who lose their job. jobs, ”he said.
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