Is it wise to choose a smaller energy supplier?

  oresome 12:47 25 Nov 2018

Spark Energy is the latest in a long line of suppliers that have ceased trading.

While consumers haven't lost out as far as I'm aware with any of these companies folding, it is an inconvenience and can give rise to unwanted issues.

I was contacted by a debt collection agency for example when Flow ceased supplying energy despite having a direct debit with them and a contract that had expired prior to their demise. Apparently my bank refused to accept DD payment demands from a company with a different trading name, but the excuse given to me from the agency was that there had been a computer glitch and data lost.

Rival firms Extra Energy, Future Energy, National Gas and Power, Iresa Energy, Gen4U and Usio Energy have all gone bust in 2018.

  LastChip 14:00 25 Nov 2018

It is the small energy suppliers that keep the large ones from ripping people off even more than they do now.

I had a terrible experience with Economy Energy, (check out the trustpilot reviews) but an excellent one with OVO, so they do vary. Right now I'm with So Energy and so far, so good, but it's early days.

  Cymro. 16:11 25 Nov 2018

What many don't realise is that the money we may get from the government to help us keep warm in winter is not payable unless you get you energy from a company that is listed as one that participates in the government scheme. I am talking about the Warm Home Discount scheme. This qualifies you for a discount of £140 paid directly to your energy provider. The other scheme is called Winter Fuel Payment and is for £200 paid in to your bank account. So if you qualify for the Warm Home Winter Discount check the letter you get for the list of suppliers participating in the scheme. Make sure the company you use is listed as if not you will not receive the payment. This only applies to the Warm Home Discount scheme not the Winter fuel Payment. Many people don't even know there are two different schemes with a set of two different qualifying rules.

  qwbos 17:00 25 Nov 2018

oresome

In some ways, you're asking the wrong question. Customers of these companies will be protected by a cross subsidy from other suppliers, effectively other suppliers' customers.

OFGEM would be doing everybody a favour if they only allowed companies into the market if they had sufficient backing to avoid this sort of failure. Going back to the early days of energy market liberalisation, there were "companies" that were little more than a phone and a FAX. Everybody's quick to knock the major players, but they have to pick up the pieces and provide emergency cover.

  martd7 17:03 25 Nov 2018

Think I read Spark Energy were being taken over by OVO?

  john bunyan 17:27 25 Nov 2018

Although our house gets the £300 (one is over 80) winter fuel allowance, I think the Warm home scheme is restricted to people with Pension Credit?

I am old fashioned enough to get gas from British Gas and electricity from SSE, but I keep an eye on tariffs.

  BT 09:18 26 Nov 2018

I am old fashioned enough to get gas from British Gas

Me too. The problem that I see about constantly changing suppliers apart from the problem of them going bust is that in the long term it all evens out. Small suppliers can respond to price changes more quickly as they can't buy futures as do the big companies. I know people will disagree but I know that I get stability with British Gas and get the service I want.

  Cymro. 10:54 26 Nov 2018

john bunian I think the Warm home scheme is restricted to people with Pension Credit?

Yes that's right John Pension Credit only.

  oresome 16:19 26 Nov 2018

"Small suppliers can respond to price changes more quickly as they can't buy futures as do the big companies."

But this is why they can run into difficulties by offering the customer a fixed price for a year or more and having no control over the wholesale price unlike the big companies.

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