Big Six supplier SSE will take over the accounts of the around 800 domestic gas customers left stranded after the failure of Cardiff Energy Supply, Ofgem has announced.
SSE was appointed through the regulator’s Supplier of Last Resort process. The transfer of the accounts will be completed within the coming weeks.
Cardiff Energy Supply customers will continue to receive gas supplies as normal and their credit balances will be protected. They’re advised to sit tight and wait to be contacted by SSE and not try to switch to another supplier in the meantime.
Tracey Costly, director of customer service at SSE, said: “I’d like to welcome all of our new customers at SSE. We are a company recognised for providing exceptional service and are proud to have been chosen by Ofgem to provide energy to these customers. Our priority now is to make sure these new customers are set up as quickly and as smoothly as possible.”
SSE has become a common destination for customers abandoned by collapsed energy firms. Earlier this year Ofgem appointed the supplier to take on 17,000 customers from Brilliant Energy and Northumbria Energy after those suppliers went into administration.
However, if they stick with SSE, those customers may soon find themselves with another new supplier. SSE is currently in talks with Ovo Energy about selling its retail energy business, which serves 5.6 million customers. Any sale isn’t expected until the second half of 2020, however.
Even as it has been gaining customers as small suppliers fail, SSE’s rolls have been declining. 500,000 customers moved away from the Big Six supplier in the year to April, many of them to medium sized suppliers.
Cardiff Energy, which supplied gas, became the 12th energy supply company to fail since the beginning of 2018 when it went bust last week. It was joined this week by renewable supplier Solarplicity.
The rash of failures of small suppliers, many of which were known for substandard customer service, has prompted consumer advocates to call for stricter regulation of the market. Unprepared suppliers are delivering poor customer service and driving up the cost of everyone’s energy bills. The cost of reallocating customers to a new supplier through the Supplier of Last Resort process is spread across all energy bills, along with any unpaid industry bills the suppliers leave behind.
Citizens Advice has revealed that energy consumers will shoulder the £172 million in industry bills left behind by the 11 energy suppliers which failed up to June. Meanwhile, customers with debts to collapsed suppliers may face predatory behaviour from administrators, which aren’t subject to Ofgem rules.
In June Ofgem introduced tougher market entry requirements for new energy suppliers, but the consumer group has called for the tests to be extended to suppliers that are already trading, and for customers of failed energy suppliers to receive better protection.
“Consumers shouldn’t have to foot the multi-million-pound bill left behind when companies collapse – and they certainly shouldn’t lose their usual protections in the process,” said Gillian Guy, chief executive of Citizens Advice.