Gas and electric company Tomato Energy has gone bankrupt, prompting the regulatory authority in the sector to intervene and safeguard the energy supply for 15,300 households and 8,400 businesses.
Administrators were brought in at the close of October following the accumulation of £3 million in debts by the company, which had been prohibited from acquiring new customers since April. In the absence of a rescue agreement, Tomato Energy is now ceasing operations. However, according to Ofgem, the provider’s numerous customers will not experience any disruptions to their energy services.
Rohan Churm, the director overseeing financial stability and oversight, stated, “I want to assure Tomato Energy’s customers that there is no need for concern. Their energy supply will remain uninterrupted, and any credit balances held by residential customers are safeguarded under Ofgem’s regulations.”
“We are swiftly progressing in appointing a new supplier for all existing customers, who are advised against switching in the interim. Once a new supplier is designated, they will be contacted with further details.”
Ofgem will communicate with Tomato Energy’s customers to update them on the appointment of a new supplier to take over the energy provision. Customers will be placed on a “deemed” contract, potentially incurring higher costs but with the flexibility to terminate at any point.
Following the collapse of 30 firms in less than a year, energy suppliers are now mandated to maintain a financial safety net. While there has been a decrease in company insolvencies since the enforcement of the new regulations, Churm remarked, “We have made concerted efforts to enhance the financial robustness of suppliers in recent times by implementing a set of regulations to enable them to withstand unforeseen crises.”
“Nonetheless, as with any competitive market, some companies may still face failure occasionally, and our primary focus is on ensuring consumer protection in such instances and minimizing associated expenses.”
