Tomato Energy Collapse Affects 24,000 Customers
Tomato Energy, a Basingstoke-based energy supplier, has recently collapsed, impacting approximately 24,000 customers. The company served 15,300 households and 8,400 businesses before ceasing its operations. In response, the industry regulator Ofgem is stepping in to ensure the protection of these customers’ energy supply and any credit balances held in their accounts.
Protection Under Ofgem’s Safety Net
Ofgem has activated the supplier of last resort safety net to safeguard Tomato Energy’s customers. This provision ensures that while customers are transitioned to a new supplier, their energy services remain uninterrupted. Customers are advised not to switch providers during this process.
Key Customer Guidance
- Take a meter reading before being contacted by the new supplier.
- Household customers will remain under the energy price cap during the switch.
- No exit fees will be imposed for switching away from the new supplier.
Background on Tomato Energy’s Collapse
Tomato Energy faced severe financial difficulties, accumulating debts of £3 million. In April, the company was barred from acquiring new customers, followed by a proposed £1.5 million fine from Ofgem for not meeting financial resilience standards. The firm filed for administration at the end of October, indicating its financial distress.
Ofgem’s Statement on Financial Resilience
Rohan Churm, Ofgem’s director for financial resilience and control, reassured customers during this crisis. He emphasized that their energy supply remains secure and that any credits will be protected. Churm stated, “We have worked diligently to improve the financial resilience of suppliers to withstand unforeseen challenges.”
Market Context
This incident is not isolated. Earlier this year, Rebel Energy also went out of business, affecting 90,000 customers in total. The ongoing issues in the energy market highlight the importance of financial stability among energy suppliers.
Ofgem’s recent regulations mandate suppliers to maintain adequate financial resources and safeguard customer funds, aiming to minimize disruption for consumers during such collapses.
