As widely predicted last week, Together Energy has become the latest casualty of the energy crisis. Its collapse on Tuesday took down its subsidiary Bristol Energy, deserted 176,000 households, and has left part-owner Warrington Borough Council out of pocket.
Rumours of an imminent collapse have swirled around the supplier since November, as overheated wholesale gas prices wiped out more than two dozen competitors. The firm failed to make a £12.4 million payment into Ofgem’s Renewables Obligation (RO) fund that supports green energy but was given until January to clear the debt.
Throughout, Clydebank-based Together Energy has insisted it was “financially stable.” Earlier this month, a spokesperson said the supplier was “still in active conversations” with potential investors.
But ultimately, Together couldn’t weather the surge in wholesale prices and fell into administration “with immediate effect” on Tuesday 18 January.
Together Energy insisted it had been properly hedged against volatile markets. “Despite press reports, we did buy enough gas and electricity for your needs, but the sustained increase in wholesale prices and the securities required to continue to forward purchase the energy, have meant that it is untenable for us to continue,” the firm said in a statement.
The company added it was “saddened” by the recent developments and “wanted to thank [customers] sincerely” for their business over the first years since its founding.
Those customers, thought to number 176,000, will be assigned to a new supplier through Ofgem’s supplier of last resort (SoLR) process in the coming days. Gas and electricity supplies will continue as normal and the credit balances of domestic customers will be protected. Customers are advised to take a meter reading and wait to be contacted by their appointed new supplier before attempting to switch away.
Together Energy’s collapse also means the demise of its subsidiary Bristol Energy. Bristol Energy was founded by Bristol City Council in 2015 as a non-profit wholly-owned utility firm for local residents. Despite attracting 100,000 customers (most of them outside of Bristol), it struggled to turn a profit in a competitive market. With losses hitting nearly £30 million, the council sold the supplier to Together Energy in the autumn of 2020 for £14 million.
By then, another local authority had already invested heavily in Together Energy. Seeking to generate a commercial return, Warrington Borough Council had purchased a 50% stake in Together Energy in September 2019. Its total exposure to Together is thought to total £52 million.
In a statement, the council said it was “very disappointed” about Together Energy’s collapse, which it attributed to “the current energy crisis.”
“Our vision was to be part of a company that tackles the climate emergency by delivering 100 per cent green energy to customers, contributes to reducing fuel poverty and provides local jobs in Warrington—particularly for those out of work or without formal qualifications—but the current market conditions are sadly not sustainable,” the council's statement continued.
“We know that Together Energy's operating model was resilient and our approach to hedging extremely robust, but the enormous and sustained wholesale price rises mean that it is now one of many companies that has had to leave the market."
In total, 27 energy suppliers have collapsed since August as a result of soaring wholesale prices.
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