Brilliant Energy has ceased trading, affecting around 17,000 domestic customers in the UK.
The small energy firm has become the third gas and electricity supplier to go bust in 2018, following Economy Energy and Our Power’s collapse in January. They are the tenth energy company in the country to fold within the last year.
The other failed suppliers were National Gas and Power, Iresa, Gen4U, Usio Energy, Extra Energy, Spark Energy and OneSelect. More than 800,000 customers have been affected by energy supplier closures since July 2018.
The energy regulator Ofgem will now find a new supplier to take on Brilliant Energy’s customers. Any affected customers have been told that their energy supply will not be cut off, but that they should wait before switching. All outstanding balances, including money owed to customers, will be honoured.
“Our message to energy customers with Brilliant Energy is there is no need to worry, as under our safety net we will make sure your energy supplies are secure and your credit balance is protected,” said Philippa Pickford, Ofgem’s director for future retail markets. “Ofgem will now choose a new supplier for you, ensuring you get the best deal possible. Whilst we’re doing this our advice is to ‘sit tight’ and don’t switch.
“You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your new tariff. We have seen a number of supplier failures over the last year and our safety net procedures are working as they should to protect customers.”
Brilliant Energy also supplied gas and electricity under the Northumbria Energy name, so any of their customers will also be affected. Ofgem can’t guarantee that the new tariff customers will be placed on will be as competitive as their existing one, so customers have been advised to switch once a new supplier has taken them on.
“The collapse of an energy supplier can be a stressful and unsettling experience for consumers,” said Matthew Vickers, chief executive of the Energy Ombudsman. “If you are a Brilliant Energy customer, we would echo Ofgem’s advice to sit tight and don’t switch. We are keen to work with whichever supplier is appointed to take on Brilliant Energy’s customers in order to find the best possible outcome for the small number of consumers who have a complaint about the failed company open with us.”
Rising wholesale costs and increasing competition have been blamed for the high number of failing energy companies. Many of the smaller energy suppliers are offering cheaper tariffs in order to undercut their larger rivals, such as the Big Six energy firms. However, this business model has proved unsustainable for many of the smaller suppliers, and calls have been made for Ofgem to tighten the rules regarding new entrants to the market.
“The failure of another supplier is a clear sign Ofgem needs to urgently move forward with its reforms to better monitor existing companies and take action earlier when problems arise,” said Gillian Guy, the chief executive of charity Citizens Advice.