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Ofgem & British Gas Step in to Help Breeze Energy Customers

Publish on: 01/10/20 12:01 AM

Written by Watt Utilities Team

Energy challenger supplier Breeze Energy has recently ceased to trade despite topping the customer rankings for Citizens Advice in recent months. It is the ninth retailer to leave the market in 2019.

All customers of Breeze Energy are protected under energy regulator Ofgem’s safety net, which means all outstanding credit balances of its domestic customers are honoured.

Ofgem has assigned Big Six supplier British Gas to take on nearly 18,000 domestic customers of the now-defunct energy firm. The appointment followed a competitive process to determine which supplier can provide the best deals for Breeze Energy’s consumers.

Breeze Energy goes bust

Ofgem revealed in a statement that Breeze Energy filed for the process of Supplier of Last Resort (SoLR) last 18 December.

In November, Ofgem sanctioned Breeze Energy to pay-up on its late Renewable Obligation taxes plus interest, which amounted to over £486,200.

The regulator warned the supplier that it would revoke its licence for being one of two providers to owe a considerable amount for the Renewables Obligation fund.

Breeze Energy was also found to owe more than £500,000 in Capacity Market payments. Unpaid charges of over £10.9 million across suppliers were to be recovered and redistributed to the contract holders to fulfill the mutualisation process that only recently recovered from a standstill.

It was revealed that Breeze had entered the second level credit default with Elexon, code administrators, on 16 December, and the first level after two days.

Prior to choosing a new supplier, Ofgem has advised Breeze customers to avoid switching to another energy provider and to have the latest meter reading taken for reference when the appointed supplier will contact them and take over the account.

The regulator had encouraged consumers to stay put until the new supplier is chosen to make the transition smooth, including the process of paying back their outstanding credit balance conveniently.

Ofgem further assured the customers that they would be protected by the regulator’s safety net, meaning that their energy supply will remain available despite the transition.

British Gas gets appointed

A few days after news of Breeze Energy going bust went around, Ofgem announced that British Gas would take on 18,000 domestic customers of the defunct supplier. The regulator cited the new supplier’s competitive tariff to be offered to the existing Breeze clients.

Ofgem further indicated that British Gas would be absorbing a significant slice of the costs that Breeze Energy incurred, including the money it owes to former and existing customers. It’s guaranteed that the transition does not affect the energy supply, which means that they can continue as usual and use energy whenever necessary.

Customers will be contacted by British Gas to complete the transfer of the account and set them up to a new British Gas tariff accordingly. Customers who choose to switch suppliers are free to do so without having to pay for exit fees.

Ofgem Director for Future Retail Markets Philippa Pickford made the announcement about British Gas’s appointment as the new supplier of existing Breeze Energy customers. She addressed customers regarding shopping for a new retailer, stating that they can look for better deals as soon as the transfer of the account to British Gas will be completed to ensure that credit balances will be honoured and outstanding debts made to customers will be paid through the new supplier.

About British Gas

British Gas is the biggest energy and Home services supplier in the UK, and belongs to the list of energy firms called the Big Six, which dominate the electricity and gas market in the country.

The energy supplier employs nearly 30,000 individuals and serves about 12 million households in the UK.

In August 2019, the energy firm lowered its standard variable tariff price down 6% as an answer to Ofgem decreasing the price cap level. British Gas customer belonging to the variable tariff pays approximately £1,177/ year for their energy supply.