The energy crisis: how to avoid being stung by folding energy companies

The past year has seen turbulent times in every industry sector. And the energy sector is no different. Rising wholesale prices have seen our gas bills soar. And with several suppliers going bust, many of us are now finding ourselves in a vulnerable position.

By Raman Sandhu

More than 3 million customers have seen their suppliers go bust since the summer. This began when suppliers couldn’t keep their promise to customers of cheap fixed deals, as gas prices began to increase.

How did this happen?

While there were many factors contributing to the current crisis, one of the reasons was the energy price cap. The energy price cap is set by Ofgem, the energy regulator, and controls the cost of gas and electricity in the UK. The cap sets the maximum price that suppliers can charge on standard or default tariffs. This means that energy suppliers could not pass on recent wholesale gas price increases to customers.

In addition, a cold winter in Europe put pressure on gas supplies, leading to less stored gas. There was also increased demand for liquefied natural gas, from the Asian markets.

What can be done?

It is important that businesses and individuals protect themselves during this turbulent time. But while you wait for Ofgem to find a solution, we have compiled a few tips on how to avoid getting stung if your energy company collapses:

  • Make sure you take a meter reading as you need to know the final reading from your previous supplier.
  • Rest assured that your supply won’t as you transition to another supplier.
  • When they do get in touch, ask them to put you on their cheapest tariff and then shop around if you need to.
  • Your new contract will be a specially ‘deemed’ contract that may well be charged at a higher rate as energy companies take on new customers.
  • Check that your direct debit to your old supplier has been cancelled. Any debts that you owe to your old supplier will need to be paid back. Alternatively, you may need to pay outstanding amounts to your new supplier, depending on the agreements made between them.

Your new supplier will help you with any previous credit balances you may have had. And they can also assist you in managing your new account balance.

Free local resources and outreach programmes

During the course of the pandemic, resources have been stretched more than ever. Many of us took the time to chat with neighbours during our daily walks, while others dropped off groceries to vulnerable people in our local communities. During this time local businesses faced difficulty, and they continue to do so.

But there are many ways that we can lend a helping hand in our local area. Each and every business, as well as every individual, can make an impact on their community.

By helping those around us, we are in turn helping ourselves. What’s more, we will be living in a thriving community, content in knowing that we have done our bit to get the country back on track.

What’s out there?

Croydon Commitment’s Ways 2 Work initiative works with businesses in the local area to set up projects and activities that help Croydon residents, and the environment. Since 2004, the programme has supported hundreds of local businesses and thousands of residents. They have also raised significant amounts of money for the Grassroots Trust.

Surrey’s community outreach programme also works to enable a bright future for its community. Volunteers help adults facing life challenges such as homelessness, living in sheltered accommodation, and those on low incomes.

The programme provides learning opportunities to help individuals access an education that could navigate them towards a more hopeful future.

The programme aims to cover different aspects of support. Including confidence building, finances and budget management. Volunteering for local community projects such as this one can make a real difference to the people involved, and the surrounding area.

bags of food shopping

What can you do?

There are many other online resources, geared towards helping each other. And there are a plethora of other ways that you can help your community. Such as:
  • Offering to deliver groceries to those who are shielding.
  • Checking in with older, vulnerable neighbours.
  • Shopping local and supporting your favourite independent shops.
  • Donating to charities that may not be able to carry out their usual fundraising activities.
With Christmas around the corner, vulnerable people and the local community need support now more than ever. And every little bit helps. Make sure you give back this festive season and help those around you.