GB Energy Supply collapsesCustomers face rising gas and electricity bills
28 November 2016
GB Energy Supply went out of business over the weekend, leaving its 160,000 customers facing higher bills for winter. Find out what you should do if you're a GB Energy Supply customer, and if you should worry if you're with another small energy supplier.
GB Energy Supply said in a statement on its website that 'swift and significant increases in energy prices over recent months' meant its position became 'untenable'. It stopped trading on Saturday.
Energy regulator Ofgem is now working to move all GB Energy Supply customers to a new supplier. But when your supplier changes, your energy bills could rise too. This is because the new supplier doesn't have to put you onto its cheapest deal automatically.
Which? managing director of home and legal services, Alex Neill, said: ‘We encourage affected customers to take a meter reading as soon as possible. When your new energy supplier contacts you, ask for the cheapest deal available but remember you don’t have to go with this new supplier.
‘Do some research to ensure you are getting the best possible deal for you. Which? Switch provides consumers with a transparent and impartial way to compare energy tariffs. You can also call us on 0800 410 1149.’
GB Energy Supply customers: what you should do now
If you are a GB Energy Supply customer, your gas and electricity supplies will not be affected.
Once a new supplier has been found, it will contact you with more information. We will also publish details as soon as we know more.
In the meantime, take meter readings for gas and electricity and wait until you are told about your new supplier.
GB Energy Supply requested that customers don't call its customer services centre. Our undercover investigation into energy firm call waiting times found it took, on average, six minutes and 27 seconds to get through to a person in customer services (research: two-week period in September and October). The fastest supplier picked up the phone in an average of 21 seconds.
Will my energy bills go up?
When a new supplier is appointed, you will be put onto a 'deemed' contract. This means it's not one you have chosen and will last until you make a change. Your bills may go up as a deemed contract, as they are usually more expensive, according to Ofgem.
When your new supplier contacts you, ask for its cheapest deal, and use an independent switching site, like our own Which? Switch, to compare gas and electricity deals to find a cheaper tariff. If you were on a fixed tariff, you won't have to pay an exit fee.
If you are in credit to GB Energy Supply, your new supplier will tell you what will happen with this. Ofgem said that it's working to protect customers' credit balances and GB Energy Supply should not take any more direct debit payments.
If you are in debt to GB Energy Supply, your direct debit payments will be taken as normal. Your debt will not be moved to your new supplier.
Are small energy suppliers safe?
The last energy suppliers to go bust were small business energy suppliers Bizz Energy and Electricity4Business in 2008.
Suppliers that have recently increased their prices have cited rising wholesale costs. Larger energy companies are able to forward-buy energy - purchase in bulk in advance - which means they can guarantee prices for longer. GB Energy Suppy said, as a small supplier, it was unable to do this so couldn't 'access the best possible wholesale prices'.
Since it entered the energy market in 2014, GB Energy has offered some of the cheapest deals. It grew fast, gaining its 160,000 customers in around two years. But in October, it raised the price of its standard tariff by 30%, following a 7% price rise in August. You can find out more about the company in our dedicated GB Energy Supply guide.
Other small suppliers have also raised their prices this autumn. However, small energy suppliers often offer some of the cheapest fixed gas and electricity deals, which are ideal if you want to keep your bills down. Many also top our annual energy customer satisfaction survey.
Check how much credit you are in with your energy supplier. If you pay by direct debit, it's usual to be in credit at the beginning of winter. But if your credit balance is much more than your monthly payment, ask your supplier for a refund and ask for your direct debit to be reviewed so you're not paying more than you need to.