Four more energy companies ‘could go bust this week’ – leaving hundreds of thousands of families facing higher energy bills 

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  • Ofgem may confirm the collapse of four more energy companies as soon as today
  • It will have increased 13 times since September and is expected to go up more this winter
  • Energy companies struggle as wholesale prices touch record highs

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Four more energy suppliers could fall this week amid rising wholesale energy prices, leaving thousands of homes facing higher bills.

According to Sky News, last week the watchdog warned that Offgame could make an announcement as early as today, after more companies were at risk of bankruptcy.

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Several British suppliers have stopped trading over the past few weeks as prices hit record highs and tariff caps have forced smaller firms to struggle to cope with rising costs.

Sky News reports that at least four suppliers were in talks with Offgame on Tuesday about entering into the regulator’s supplier of final resort systems, where a failed energy company could send customers to a rival. are given.

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Four more energy suppliers are reportedly on the verge of collapse amid rising wholesale energy prices, which could leave hundreds of thousands of homes facing higher energy bills.

The price of natural gas in the UK market has risen in recent weeks and remains high

The price of natural gas in the UK market has risen in recent weeks and remains high

Offgame declined to comment on the report.

Wholesale gas prices have soared in recent months as economies reopen from COVID-19 lockdowns and high demand for liquefied natural gas in Asia has outpaced supplies to Europe.

Some 12 British energy suppliers have already collapsed this year, affecting more than 2 million customers.

Struggling to deal with record gas prices, nine fold in September, including those of Enstroga, Igloo Energy and Symbio Energy.

Families linked to the collapsed companies would be placed in a rescue system that would involve offgame searching for a new supplier to take them in.

While there is no danger that their gas or electricity supply will be cut off, they will be turned into tariffs, which are likely to be around £400 more per year.

How are suppliers of last resort determined?

When an energy supplier collapses, its customers are transferred to another firm, which is known as a supplier of last resort.

Under the ‘supplier of last resort’ system, outstanding credit balances of existing and former customers will be paid and relocated households will be protected by an energy price cap.

SOLR is determined through a bidding process, where Ofgem selects the most suitable supplier to take on the clients of a collapsed firm.

There are many factors to consider when appointing a SOLR.

They include time and supplier size, which means larger suppliers may have to step in if a collapsed firm has too many customers.

Supplier systems are also considered, offering an advantage similar to dismantled systems.

Customer timing is another factor, for example suppliers with business customers may be more able to take on similar customers.

Finally, and this is more dependent on the fallen supplier, Ofgem will need up-to-date information about customers. More information means it will be easier to determine which supplier takes charge.

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Under the ‘supplier of last resort’ system, outstanding credit balances of existing and former customers will be paid and relocated households will be protected by an energy price cap.

But customers who were on cheap fixed price deals signed before the gas price hike were warned that bills could rise to hundreds of pounds.

And now, with the annual price range rising to £1,277 from October for a typical family, British Gas and EDF Energy are among the suppliers set to charge customers the top rate.

So far 1.7 million homes have been abandoned by energy companies that have already been demolished and thousands more could fall into the same condition if four more are added this week.

Earlier this month, more than 230,000 homes were moved to e.on Next, as the energy supplier took pieces from three failed rivals in the region.

Regulator Ofgame said it has appointed e.on Next to compete with customers who were once on the books of Enstroga, Igloo Energy and Symbio Energy.

There were 233,000 customers between these three companies.

All of them will be replaced by E.on, and they can continue to use their gas and electricity as before.

Of the nine casualties in the sector since the beginning of September, three are collapsed suppliers.

This includes some smaller suppliers such as MoneyPlus Energy and Enstroga, which had just 15,000 customers between them, but also larger players such as Avro, which supplied 580,000.

Energy firms that accept new customers from failed suppliers have been assured that they will be able to recoup any costs and losses incurred as a result.

This process would allow them to claim funds through a levy that would apply to all customer bills and could run up to over £1 billion.

The business secretary, Quasi Quarteng, has said repeatedly that the government has no intention of offering or offering financial aid to failed energy firms.

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