Gas and electric company Tomato Energy has gone out of business, prompting the regulatory authority in the industry to intervene and safeguard the energy supply for 15,300 households and 8,400 businesses.
The company faced insolvency in late October due to accumulating a debt of £3 million and had been prohibited from acquiring new customers since April. In the absence of a rescue plan, Tomato Energy is now shutting down. However, Ofgem assured today that its numerous customers will not experience any disruption in their energy services.
Rohan Churm, the director responsible for financial stability and oversight, reassured Tomato Energy customers that their energy supply will continue without any interruptions. Any credit balances held by residential customers are protected under Ofgem’s regulations.
Efforts are underway to swiftly designate a new supplier for all existing customers, and customers are advised against switching providers in the interim. Once a new supplier is appointed, customers will receive further instructions from them.
Ofgem will communicate with Tomato Energy customers to notify them when a new supplier has been selected to take over the energy supply. Customers will be placed on a “deemed” contract, which may entail higher costs but can be canceled at any time.
Following the collapse of 30 companies in less than a year, energy suppliers are now mandated to maintain a financial safety cushion. While the number of collapses has reduced since the implementation of these new regulations, Churm emphasized the importance of ensuring suppliers’ financial resilience to withstand unexpected challenges.
In a competitive market, occasional company failures are inevitable, and the primary focus remains on safeguarding consumers and minimizing any associated expenses.