Together Energy and Bristol Energy have now gone bust so once again within less than a year we have to find another supplier! Just seems that suppliers going bust will never end! 
Energy prices
- Thread starter Buckman
- Start date
Bad decision by Bristol council to set up an energy company. Wonder how much council tax money was wasted before they sold it on and the next owner failed.
Not a good position for you as current tariffs are much higher than those even six months ago. Coming in winter too is bad news.
PS £35 million.
https://thebristolcable.org/2020/05...n-of-public-money-was-lost-to-bristol-energy/
Not a good position for you as current tariffs are much higher than those even six months ago. Coming in winter too is bad news.
PS £35 million.
https://thebristolcable.org/2020/05...n-of-public-money-was-lost-to-bristol-energy/
For the moment you don't need to find another supplier - Ofgem will transfer you to another supplier where you'll be on the capped rate and despite the huge increase due in April the capped rated is better than any NEW fixed rate.Together Energy and Bristol Energy have now gone bust so once again within less than a year we have to find another supplier! Just seems that suppliers going bust will never end!
As Martin Lewis extols people "at present, do nothing"
A Scottish company has also gone bust today. The basic problem is that the people still on a fixed contract from before September are getting power at a rate way below the sum the provider is paying for it and the fixed tariff also means that they cannot charge enough to even break even on the standard rate they are allowed to charge.
Basically only the strongest companies are able to strive although I do know some of the ones who have gone down have had serious problems which predated the price rises, but those now going down just did not have the reserves to survive a disaster that they did not see coming.
I have no knowledge of the Bristol company but do think the criticism is likely to be the usual suspects being wise after the event.
Basically only the strongest companies are able to strive although I do know some of the ones who have gone down have had serious problems which predated the price rises, but those now going down just did not have the reserves to survive a disaster that they did not see coming.
I have no knowledge of the Bristol company but do think the criticism is likely to be the usual suspects being wise after the event.
Fundamentally councils should not set up business ventures which risk council and taxpayers money. The problem with Bristol Energy was the same as many smaller newcomers. They didn’t purchase far enough ahead and were too reliant on short term spot prices staying low. Our tariff with BG was fixed last April and runs until April 2023. It will be costing BG money too.
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Together Energy and Bristol Energy have now gone bust so once again within less than a year we have to find another supplier! Just seems that suppliers going bust will never end!
So Central Government bans fracking and reduces North Sea gas extraction, makes us dependant on electricity from Europe generated by gas from Russia.
Russia reduces flow so gas price goes from £50 per therm to £470 per therm.
So electricity price rises to above the cap. So supplier closes or goes bust.
If you want to be green this what it costs.
"There is no situation so dire that Government cannot make it worse" !!
I think that it was local council planning rejections and extensive public protests that led to no new fracking development in England, and Government requiring further evidence of its safety and environmental aspects. Where is it stated that the Government have reduced North Sea gas extraction. I thought they were still mulling over a new oil field development off of Scotland, but I’m not aware they have reduced gas, or oil extraction. Its the energy companies that determine the rates of extraction from existing sources. And with energy prices so high they would be absolutely mad not to extract the maximum rate. Which will boost their profits and Government tax revenues too.
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Local news are saying £46m.
I agree with you, councils should concentrate on providing the service they are paid for. I remember some years ago, 2008, many councils got stung on the investments of ratepayers money when Iceland banks went under.
John
That was because councils are duty-bound to get interest on their reserves, to reduce the burden on rate-payers and the Iceland banks over-promised with a high interest rate.
Many suppliers go under because of bad consumer debt. It is very costly for a company to get a debt paid. First they need to issue summons which costs. If the defendant does not respond within the time frame, then someone needs to take it to court to get a court order to disconnect the supply. More costs.
Once the supplier has the court order the supplier then has to arrange for the Meter operator and bailiffs to attend to disconnect the supply. Again costs. If a business, many businesses have stock on loan so bailiffs cannot seize the stock as it does not belong to the defendant.
What they do seize may not be enough to cover the debt when it goes on auction. If the premises are locked, then the additional services of a locksmith and maybe the police are required. More costs.
If the debt is for only a couple of hundred quid, is it worth the supplier having all the hassle with costs however if you have a 1000 bad debtors it all adds up, but so do costs. No wonder suppliers go bust!
Even worse if a domestic debtor due to many different circumstances and in many cases bailiffs cannot enter the property due to possible violence unless police are present. domestic premises are a whole new ball game.
Once the supplier has the court order the supplier then has to arrange for the Meter operator and bailiffs to attend to disconnect the supply. Again costs. If a business, many businesses have stock on loan so bailiffs cannot seize the stock as it does not belong to the defendant.
What they do seize may not be enough to cover the debt when it goes on auction. If the premises are locked, then the additional services of a locksmith and maybe the police are required. More costs.
If the debt is for only a couple of hundred quid, is it worth the supplier having all the hassle with costs however if you have a 1000 bad debtors it all adds up, but so do costs. No wonder suppliers go bust!
Even worse if a domestic debtor due to many different circumstances and in many cases bailiffs cannot enter the property due to possible violence unless police are present. domestic premises are a whole new ball game.
Most suppliers are going under because they were under-capitalised and did not hedge their energy purchases. The top dog at Octopus said recently that they had bought (IMSMC) three years ahead so the rises in gas and electricity costs had not affected current user contracts so much..
The reason many of those that have failed did so not just due to the inability to hedge but because they were having to pay the new prices that they could not pass on to the consumer because of OfGem's price cap system.
The reason many of those that have failed did so not just due to the inability to hedge but because they were having to pay the new prices that they could not pass on to the consumer because of OfGem's price cap system.
Also many suppliers may not have been able to buy long term in advance as the bank refused to extend the over draft. Bad debt is also a big issue when working on slim profit margins especially with suppliers who service business and domestic premises.
Even 10% bad debt is a huge chunk out of your profit and running costs. If I remember correctly across the supplier spectrum on average bad debt exceeds 10%.
The supplier for whom I was working went into administration owing in excess of £25 million mainly bad debt. The administrators were able to recover most of it over several months and eventually reduced the debt to under £4 million which they were not able to recover beofe closing up shop.
Fully understand that, however, that does not mean I am in agreement with the strategy for yearly expenditure. However. I was forgetting the small matter of pension fund investments. 🥵
John
The problem for the power companies is worse than many other industries as in many cases they are unable to cut off customers who will not or cannot pay so the debts increase.
Not really a case of unable, but more of a cost factor as for example why spend £500 to recoup £250? If you have a customer base of 100,000 customer and 10% are bad debtors, that is a substantial amount of money. if it is a big business that collapses the bad debt could be several or more thousand enough to break a smaller supplier.
Admittedly the customer has to pay court, bailiff and other costs, but if they were not able to afford the £250 in the first place, chances of getting any money out of them are very slim so supplier ends up with the costs anyway.
IMHO too many small startup suppliers with insufficient funds were allowed to enter the marketplace.
I think your final sentence says it all. And the customers likely to transfer to the “ cheaper” start ups may well include those for whom finances are tight In any place.
Going back to this thread I wonder if Covid & lockdowns were one of the main reasons for many suppliers going belly up? Domestic power is bought in advance for a home based on historical data. The same for business premises.
During lockdown electric consumption at home would have increased dramatically so supplier would have needed to purchase more energy for domestic at a higher price than they were charging the customer who was in contract.
Conversely they may have had a surplus of energy for business premises and were not getting the income required. This surplus probably could not be transferred to domestic premises due to the original cost of the business kwh being higher.
The other scenario is that domestic consumption increased especially during winter months however businesses still operated with a skeleton staff and whether you had 100 people working or only 10 the amount of power used was about the same depending of course on the business.
We still have not had official notification that Bristol Energy has gone into administration. We also have a surplus with them and are in credit.
During lockdown electric consumption at home would have increased dramatically so supplier would have needed to purchase more energy for domestic at a higher price than they were charging the customer who was in contract.
Conversely they may have had a surplus of energy for business premises and were not getting the income required. This surplus probably could not be transferred to domestic premises due to the original cost of the business kwh being higher.
The other scenario is that domestic consumption increased especially during winter months however businesses still operated with a skeleton staff and whether you had 100 people working or only 10 the amount of power used was about the same depending of course on the business.
We still have not had official notification that Bristol Energy has gone into administration. We also have a surplus with them and are in credit.
We also with Octopus Energy but our fixed deal finish on the 24th January but if we wanted another fixed deal it had gone up double the amount so we have decided to try Flexible Octopus
I think these people have lots of money and see an opportunity to make more.They don't make anything,just buy a tranche of electricity at a discount and sell it to you for a profit.Whenever their margins reduce or it costs them money they just shut up shop and disappear.Together Energy and Bristol Energy have now gone bust so once again within less than a year we have to find another supplier! Just seems that suppliers going bust will never end!
I don't think any were able to forecasat the huge jump in the price of energy. I don't think they buy at a discount as they have to bid for the energy just like all other suppliers. Smaller suppliers who do not have huge cash reserves probably need to buy from one of the Big Six who can force the price up or down.
Smaller suppliers tend to buy on the spot market which in times past could lead to them getting lower prices. but the disadvantage is that they are not capitalised to be able to bid very far ahead. the larger companies are able if they want to contract some years ahead. But I suspect that the lack of any real regulation led to many jumping in to make a quick buck, aligned with the exhortations to shop around for savings has exacerbated the current situation.
Look at it this way. Energy is being sold at .10p a kwh and is available for bidding, One of the Big Six bids at 11p, another bids at 12p and so on. No wonder smaller supplies hardly get a look in and have to bid at the higher price.
The other method is that one of the Big Six buys in bulk at a lower price and then sells to a smaller supplier and makes a quick profit on the excess they bought. The smaller supplier stands no chance in the bidding war with the Big Six.
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