Customers of collapsed Green to move to Shell Energy

·4 min read
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Shell Energy has been appointed as the new supplier for 255,000 domestic gas and electricity customers of Green, which collapsed nearly a week ago.

The small number of business customers on the books will also be moved.

Those affected have been advised by the regulator Ofgem not to take any action until the transfer is completed. They can then shop around but are unlikely to find any cheaper deals.

Six suppliers have gone bust recently, affecting nearly 1.5 million customers.

Green ceased trading on 22 September - the same day as another supplier, Avro - as firms buckle under spiking wholesale gas prices.

"We understand that this news may be unsettling for customers, however they do not need to worry. Their energy supply will continue as normal, and customer credit balances will be honoured," said Neil Lawrence, Ofgem's director of retail.

"Shell Energy will be in contact with customers over the coming days with further information."

Shell became a major player in the domestic energy supply market when it bought First Utility in 2018.

A man taking a baking tray out of the oven
A man taking a baking tray out of the oven

The decision comes on the day Nigel Pocklington, chief executive renewable energy supplier Good Energy, said his company would not take on new customers from collapsed firms because they were a "loss-making proposition".

Mr Pocklington told the BBC's Today programme that while Good Energy was "sympathetic" to customers feeling uncertainty, larger companies may be better placed to take them on.

According to the firm's latest financial update, it supplies renewable energy to about 275,000 customers.

Any customer of a collapsed firm is moved automatically to a new supplier which energy regulator Ofgem appoints. Customers may end up on a more expensive tariff.

On Sunday, Ofgem said Good Energy's partner Octopus Energy had agreed to supply power to about 580,000 domestic customers of collapsed supplier Avro Energy.

Mr Pocklington added: "At the moment, [Ofgem] will have been looking around for who was willing to take customers on. Octopus are a very well-reserved and well-run business will feel that while they may be looking at a short-term loss for these customers, the long-term gain will be strong."

Ofgem said outstanding credit balances, including money owed to both existing and former Avro Energy customers, will be honoured.

Ofgem added that domestic customers will also be protected by the energy price cap with Octopus, which limits how much firms can charge per unit of gas.

Octopus said on Sunday that it had offered to supply power to Avro's customers and hoped to make the change "as smooth and straightforward" as possible.

The supplier said it would be contacting all Avro customers over the next 48 hours. It stressed that all customers' energy supply will be maintained and that their money is safe.

The regulator has not yet appointed a new provider for Green customers, but all affected customers will still continue to receive energy.

Customers face higher bills

Ofgem said on Sunday that gas prices are up four-fold but rejected claims from the industry the current energy crisis represents a failure to adequately regulate the market.

But senior executives in the industry told the BBC the regulator knew full well that many smaller suppliers would not be resilient in the face of rises that should have been part of the regulator's stress testing of the sector.

Mr Pocklington said on Monday: "The regulatory requirements to set up an energy firm probably need some examination.

"It has been very easy to set up in the last few years, you needed about £10,000 to buy an energy company in a box in some ways. Doing that will mean some people will be under-funded and under-resourced and will not be able to afford hedging."

Millions of customers face being moved to higher tariffs from bigger suppliers and the cost those larger companies incur from taking on new customers will be added to all consumers bills through an industry-wide levy.

The BBC has been told that ministers believe the current system for managing the failure of energy companies, which allows companies to recoup losses through the levy, is working satisfactorily - even though it will add costs to millions of customers' bills.

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