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The energy crisis has left many customers on what is known as a Supplier of Last Resort. This week, EDF was appointed to be the Supplier of Last Resort for 11,700 domestic customers formerly with Zog energy. However, the phrase is alien to those who have not had their energy provider go bust, so what exactly is a supplier of last resort and what does it mean for your tariff?
What are Suppliers of Last Resort?
Customers are transferred to a Supplier of Last Resort when their current energy provider ceases to trade. Ofgem will automatically allocate a Supplier of Last Resort to supply gas and electricity to your business without you having to do anything. This has become a common occurrence during the recent energy crisis, with many suppliers no longer being able to trade in a commercially viable manner.
The move to transfer customers to a new supplier guarantees that your energy supply will continue, so even if your supplier goes bust, your supply of energy will continue.
Will being transferred affect my current energy tariff?
Whilst Ofgem have reassured customers that a supplier’s closure will not affect their energy supply, the same cannot be said for their tariffs.
Customers whose supplier has gone bust will not continue on the same tariff with their new supplier. Instead, they will be transferred onto a deemed rates tariff.
Typically, deemed rates are significantly more expensive than contractual rates. If you have been transferred to a supplier of last resort, you should be prepared to face a significant increase in your energy bills.
To make matters worse, deemed rates aren’t capped by Ofgem. This means that business consumers are significantly more at risk than household consumers, who are protected by an energy price cap, limiting the amount a supplier can charge them.
Can I Avoid Being Transferred to a Supplier of Last Resort?
Ofgem’s current advice has been to sit patiently until you have been transferred to a Supplier of Last Resort, we believe that you need to be proactive. By sitting patiently and trying to weather out the storm, you could be placed on a deemed rates tariff that is way over your business’ budget.
The collapse of your supplier means that you have no contract exit fees. This means that you are free to shop around and find a better new tariff.
How BP can help
At BP, we have a wealth of industry specialists, connections with the leading energy suppliers and expertise in alternative fuel sources meaning that we can find you the most competitive tariff and help you avoid costly deemed rates.
We will provide you with a dedicated account manager who will work with you to understand what package you need before providing you with a range of energy options. Contact BP for a free consultation today, let us provide your business shelter from the ongoing energy storm.