British Gas has agreed to take on the customers of People’s Energy after it joined the ranks of smaller energy suppliers that have collapsed during the current gas crisis.
This is the fourth customer switchover that British Gas has benefited from as part of regulator Ofgem’s supplier of last resort (SOLR) process, which will ensure that customers continue to receive an uninterrupted supply of gas and electricity if their supplier ceases trading.
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Centrica PLC (LSE:CNA) said its British Gas arm will pick up the 350,000 domestic customers and around 500 business customers from People’s Energy after it went under on 14 September.
All costs incurred by British Gas that it is not able to recover as a result of taking on the customers, including additional costs of buying energy, the refund of credit balances, and other operating costs, will be recoverable through the SOLR scheme’s industry levy.
Chris O’Shea, Centrica chief executive, said: “We welcome People’s Energy customers to British Gas and we’ll ensure the switchover is as smooth as possible.”
He said actions taken over the past couple of years “mean Centrica is in a robust financial position, and, as a responsible energy supplier built on a sustainable model, we are well hedged for the coming winter”.
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Over the weekend, Bulb, the UK’s sixth-largest energy company, was reported to be seeking emergency funding to help it cope with a surge in wholesale gas prices that has seen them rise 250% so far this year.
With four other suppliers reported to be in serious difficulty, some industry commentators predict the number of small energy providers could shrink to just ten by the end of 2021 from 55 at the start of the year.