Goto Energy becomes 13th supplier to collapse as gas prices surge

On today’s show, we look at how renewables could keep energy costs down this winter.

2021-10-18 20:54:00

Goto Energy has become the latest supplier to cease trading amid surging wholesale gas prices, regulator Ofgem said.

The company’s 22,000 gas and electricity customers will be transferred to a new supplier and funds that they have paid into their accounts will be protected.

Goto is the 13th energy firm to go bust since the start of September, with around two million customers in total affected, over a period when the price of gas on the wholesale market has hit record levels.

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Firms that have not “hedged” – or insured themselves – against the possibility of price spikes have in many cases been caught out because it means they are then selling energy to customers at a loss.

Announcing the latest collapse, Ofgem pointed to the “unprecedented increase in global gas prices which is putting financial pressure on suppliers”.

“Ofgem is working closely with government and industry to make sure customers continue to be protected this winter,” the regulator said.

Customers of Goto were advised that Ofgem would choose a new supplier for them and that they should not switch in the meantime.

Domestic customers will be protected by the energy price cap when they switch.

On its website Goto said: “Goto Energy is ceasing to trade. Ofgem, the energy regulator, is appointing a new supplier for its customers.

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“Customers need not worry, their supplies are secure and funds that domestic customers have paid into their accounts will be protected if they are in credit.”

Goto’s failure comes after three companies – Daligas, Pure Planet and Colorado Energy – all ceased trading last week, affecting more than 250,000 customers altogether.

In a separate announcement on Monday, Ofgem said Shell Energy had been appointed to take on those customers.

Last week, the chief executive of Centrica – owner of Britain’s biggest supplier British Gas – called for regulators to act to ensure another crisis on the current scale can never happen again.

Chris O’Shea told Sky News there should be a “fit and proper” test for executives running energy firms.

He estimated that the cost of covering customer bills for those whose suppliers go bust – which will be paid for by a levy spread across all customers – had already reached £2bn.

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Source by [earlynews24.com]