Royal Dutch Shell’s household energy supply business has taken on the customers of failed rival Green Supplier, according to the industry’s regulator, amid fears more small providers will collapse amid the record surge in energy costs.
Ofgem confirmed on Monday morning that Shell Energy had won a competitive process to take in the 255,000 households on Green’s books following its demise last week – on the same day as larger Avro Energy.
It had been confirmed on Sunday that Avro’s customer base had been transferred to Octopus Energy.
Outstanding credit balances owed to existing and former Avro and Green customers will be paid, Ofgem said, and householders would be protected by the energy price cap.
However, those on fixed rate deals could find they end up paying more, as their new gas and electricity suppliers face paying through the nose to secure the energy they need on the market.
Wholesale gas prices alone are up more than 450% over the past 12 months – a consequence of many factors, though easily explained by the fact that stocks were low after a cold end to last winter and global supply problems linked to the coronavirus crisis.
The effects of the price storm have already been felt across the wider economy.
It was blamed for the UK’s largest producer of CO2 temporarily halting production at its two UK plants – sparking fears that industries from brewing to meat production would suffer in the run-up to Christmas.
While the government intervened to ensure carbon dioxide stocks, Ofgem is tasked with dealing with the fallout from small household suppliers going under after ministers refused bailouts for bad business models.
Nine firms have failed this year.
Ofgem said that once their transfers to the new suppliers was completed, customers of Avro and Green who want to switch in a bid to secure a better deal would not be charged an exit fee.
It could pay to be on a so-called default – or standard variable – tariff as it is capped by the regulator.
However, the price cap – under which 15 million households currently fall – is due to rise by £139 to an average £1,277 on Friday.
The increase was announced in August as the spike in wholesale gas and electricity costs found another gear in the run-up to winter.
Wholesale gas contracts for October delivery were just shy of 190p-per-therm on Monday and show no signs of easing because of the Europe-wide supply squeeze.
Over the past decade, the cost has averaged about 40p-er-therm.
Ofgem said the suppliers would clearly inform Avro and Green households about what their new tariffs would be.
Its chief executive told MPs last week he expected other energy firms to follow the pair in going out of business.
Shell Energy Retail CEO Ed Kamm told Green’s customers his company was a “well-capitalised supplier with long term
ambitions to help British households get to net-zero emissions”.
Shell aims to grow its power customer base across the world as part of its strategy to shift away from oil and gas and slash greenhouse gas emissions in the coming decades.
Source : skynews