Suppliers which cease trading
Where a supplier ceases to trade, Ofgem has authority to protect the interests of consumers facing a loss of supply. Ofgem will appoint a new supplier – known as the supplier of last resort – for the affected customers as quickly as possible to ensure minimum disruption.1Condition 8 SLC Ofgem has issued guidance on the manner and circumstances in which it expects to exercise these powers.2Ofgem, Supplier of Last Resort: revised guidance, 21 October 2016 Ofgem arranges the maintenance of supply until new arrangements with an alternative energy supplier are put in place. Only when the power to appoint a supplier of last resort is not feasible will Ofgem seek the consent of the Secretary of State to make an application for an Energy Supply Company Administrator to be appointed.3Gas and Electricity Markets Authority v GB Energy Supply Ltd  EWHC 3341 In taking over from a failed supplier, the new supplier should honour existing contracts and debts. In September 2021, Ofgem stated in the case of failed supplier Avro Energy that the substitute supplier, Octopus Energy, would honour domestic credit balances for both current and past customers after reviewing accounts and deduct any unbilled charges for supply by Avro Energy.4Ofgem, Avro Energy Customers: Your questions on new supplier Octopus Energy, 26 September 2021
Can a supplier voluntarily wind up?
A supplier cannot voluntarily wind up without permission of the court.5s161 EA 2004; s96 EA 2011 Permission is only granted if the Secretary of State and Ofgem have been given at least 14 days’ notice.6s161(3)(b) EA 2004 Ofgem can then revoke the company’s licences and appoint a supplier of last resort.