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Soaring energy prices claimed another UK supplier on Monday, as Bulb Energy collapsed into administration.
The supplier, which caters to 1.7 million customers, is Britain's seventh biggest energy supplier.
It had been engaged in eleventh-hour talks with the government, as well as its largest creditor the Sequoia Economic Infrastructure Income Fund.
Due to Bulb's size and large customer base, energy regulator Ofgem could not find another firm to take on that many customers as a "supplier of last resort".
According to Ofgem, in cases where an energy company goes into administration, you will be free to switch to another supplier and your credit balance will be protected. It’s unclear whether your current tariff will be honoured or whether you will end up being moved onto one linked to the energy price cap.
“We’ve decided to support Bulb being placed into special administration, which means it will continue to operate with no interruption of service or supply to members," said a Bulb spokesperson. "If you’re a Bulb member, please don’t worry as your energy supply is secure and all credit balances are protected.”
Many smaller energy companies in the previously competitive UK market have found themselves collapsing in recent weeks, amid an unprecedented rise in global gas prices.
As wholesale prices are currently higher than the UK price cap, providers are supplying energy below cost, and smaller firms don’t have the reserves to absorb such costs.
Earlier in November, Omni Energy Limited, MA Energy Limited, Zebra Power Limited, and Ampoweruk all ceased trading, leaving around 23,700 customers – both domestic and non-domestic – in need of a new supplier.
"It’s clear that with wholesale prices going through the roof, it’s proving nigh-on impossible for companies to make money under the current price cap. It raises the risk that we could see a significant hike in April next year," said Sarah Coles, senior personal finance analyst, Hargreaves Lansdown.
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