Together Energy, based in western Scotland, has become the latest British utility to go bust amid high energy prices.
The company, and its subsidiary Bristol Energy, served 176,000 domestic customers and one business customer across the UK. The company formed as a local co-operative in 2017, aiming to recruit staff from poorer backgrounds.
On its website, a statement by Together Energy thanked customers for their trade over the past 5 years. It also stated: “We did buy enough gas and electricity for your needs, but the sustained increase in wholesale prices and the securities required to continue to forward purchase the energy have meant that it is untenable for us to continue.”
The company has become the first utility to go bankrupt in 2022, after 26 bankruptcies since September 2021. In total, more than 2.3 million UK households have now seen their energy supplier go bust.
Energy regulator Ofgem will transfer Together’s customers to another, unannounced utility after a bidding process. Both Ofgem and the company have encouraged customers to submit a meter reading and take no further action.
Ofgem director of retail Neil Lawrence said: “I want to reassure affected customers that they do not need to worry, under our safety net we’ll make sure your energy supplies continue. Ofgem will choose a new supplier for you and while we are doing this our advice is to wait until we appoint a new supplier and do not switch in the meantime.”
In 2019, the borough council of Warrington, in north-west England, bought a 50% stake in the company for £18m. The council has expressed disappointment over the bankruptcy, but defended its investment decision. Reports have said that the council owes £52m in equity, loans, and guarantees to the company. However, poor council finances across the nation makes repayment of this unlikely.
The news comes as high gas prices have pushed many UK citizens close to poverty. Gillian Cooper, head of energy policy at support charity Citizens Advice, said: “Today’s announcement will add to the £2.6bn bill consumers are already facing due to these failures. With the price cap expected to go up again in April and the cost of living soaring, many are already facing impossible choices between heating and eating.”
Since September 2021, UK utilities have faced difficulties because of the rising global wholesale price of gas. In the UK, this has caused a similar rise in power prices, as a result of the country’s significant gas power use. These soon outstripped a cap on consumer tariffs, causing the bankruptcy of small and medium-sized utilities.