An energy company serving approximately 12,000 households is reportedly on the verge of collapsing. Tomato Energy has taken steps to appoint an administrator, as disclosed by The Sun. This action initiates a temporary legal halt preventing creditors from pursuing legal measures for ten days. The company lodged the notice nine days ago following the accumulation of debts totaling £3 million and a prohibition from acquiring new customers by energy regulator Ofgem earlier in April.
Recently, Ofgem warned that Tomato Energy might face a fine of £1.5 million for failing to meet financial obligations. If administration takes over Tomato Energy, efforts will be made to facilitate debt repayment. In cases where saving the company is not viable, closure could be imminent. Historically, during energy supplier insolvencies, Ofgem has transitioned customers to alternative suppliers without disrupting energy provision. The energy market has witnessed a surge in supplier collapses, affecting over two million households within a year during the peak of the energy crisis.
Simultaneously, energy prices have risen again, with the Ofgem price cap elevating from £1,720 to £1,755 for a standard dual fuel household on direct debit payment. This capped price will remain effective until December 31, subject to revision thereafter. Consumers on standard variable rate tariffs are covered by the Ofgem price cap unless under fixed-rate agreements. While there is no absolute cap on energy costs, bills are influenced by individual energy consumption levels.
The Ofgem price cap controls charges for gas and electricity units along with fixed standing charges for network connectivity. The cap sets an estimated annual expenditure benchmark for a household using 2,700 kWh of electricity and 11,500 kWh of gas over a year.