An energy company that serves approximately 12,000 households is reportedly facing imminent collapse.
Tomato Energy has submitted a notice of intent to appoint an administrator, as reported by The Sun. This legal document, filed in court, indicates the company’s impending entry into administration.
The notice initiates a temporary legal halt that prevents creditors from pursuing legal actions for a period of ten days. The Sun disclosed that Tomato Energy lodged the notice nine days ago after accumulating debts totaling £3 million and being prohibited by the energy regulator Ofgem from acquiring new customers in April this year. For money-saving energy advice, readers can explore tips from Martin Lewis or learn about keeping homes heated all day.
Earlier this month, Ofgem warned Tomato Energy of a potential £1.5 million penalty for failing to meet financial responsibilities. If an administrator assumes control of Tomato Energy, efforts will be made to devise a plan for the company to settle its debts.
In the event that Tomato Energy cannot be rescued, it may face closure. Historically, when an energy provider goes bankrupt, Ofgem facilitates the transfer of customers to a new supplier, ensuring continuity of energy provision. In recent times, during the energy crisis peak, over two million households had to switch suppliers due to the collapse of 30 firms within a year.
This development coincides with another increase in energy bills, with the Ofgem price cap rising from £1,720 to £1,755 for a standard dual fuel household paying via direct debit. The current price cap will remain effective until December 31, following which it will be revised. Consumers on a standard variable rate (SVR) tariff are protected by the Ofgem price cap unless they are on a fixed-rate plan.
It is important to note that while there is a price cap on unit charges and standing fees, your final energy bill is determined by your actual gas and electricity consumption. The Ofgem price cap sets limits on the rates for gas and electricity units, as well as fixed daily standing charges for energy network connectivity.
The price cap figure indicates the expected yearly cost for a household with average energy consumption levels, assuming 2,700 kWh of electricity and 11,500 kWh of gas consumption annually.