Avro Energy and Green Supplier Limited, not to be confused with Green Energy UK Ltd (GEUK), have become the latest energy suppliers to collapse this month, as rocketing gas prices continue to pile pressure on the struggling sector.
Ofgem said that it would ensure that Avro's 580,000 domestic gas and electricity customers, and Green's 255,000 households would be protected with energy supplies uninterrupted until a new provider can be appointed. The regulator will choose a new supplier for the affected households, and said customers should wait to be contacted by their new supplier before switching.
Together the suppliers represent a share of 2.9% of domestic customers in the market - Avro Energy 2% and Green Supplier Limited 0.9%.
Under Ofgem's safety net, Avro Energy and Green Supplier Limited customers will also see any outstanding credit balances protected.
They will also be protected by the energy price cap when being switched to a new supplier.
"I want to reassure customers of Avro Energy and Green Supplier Limited that they do not need to worry. Under our safety net we'll make sure your energy supplies continue," Ofgem director of retail Neil Lawrence said.
"If you have credit on your Avro Energy or Green Supplier Limited account this is protected and you will not lose the money that is owed to you."
Avro and Green's failure comes after energy companies PFP, MoneyPlus, Utility Point and People's Energy all exited the supply market in just over two weeks.
Last month HUB Energy, which had just 6,000 customers, also stopped trading.
Together all the recently failed companies account for more than 5% of the energy market - around 1.5m customers.
Justina Miltienyte, energy policy expert at Uswitch.com, said: "This is a double blow for the energy industry and will cause further worry for consumers.
"Soaring wholesale prices are making conditions difficult for all suppliers, but challenger brands in particular are struggling to make ends meet. Affected customers will be moved onto new suppliers appointed by Ofgem, but for now they should sit tight and wait until their account is transferred to the new provider before trying to switch.”
Customers are advised to make a note of their meter readings so that when Ofgem does move them onto a new supplier, they can ensure their bills are accurate.
GEUK is now reassuring the market that it has no link whatsoever with the Newcastle-based company, Green Supplier Limited, and that GEUK’s business is operating as normal.
GEUK is monitoring the current situation in the energy market very closely but as it has proactively hedged forwards to mitigate the current market risks, its service to customers is unaffected.
Doug Stewart, CEO of GEUK said: “As a business that has been serving customers for 20 years, we understand the importance of risk management, especially in times of volatility, we also place a great emphasis on prudent growth, customer service and of course supplying 100% green gas and electricity. This has served us well over recent years and will for many years to come.”
Anyone in Scotland with concerns can contact energyadvice.scot for free, impartial and practical advice by visiting the website here, or calling 0808 196 8660 between 9am and 5pm, Monday to Friday.
Colin Mathieson, spokesperson for Advice Direct Scotland, said: “These firms are unlikely to be the last to collapse as small suppliers struggle with soaring gas price rises.
“Hundreds of thousands of customers will be affected, but the key advice remains the same, don’t panic as there will be no loss of supply or money owed to customers, and Ofgem will switch people to a new supplier.
“However, energy companies will be allowed to lift the price cap by as much as 12 per cent from October, so it is inevitable that many people will face higher charges down the line - and this is a worrying time for many.”
Get the latest money-saving and benefits news sent straight to your inbox. Sign up to our weekly Money newsletter here .
