Gas and electricity company Tomato Energy has gone bankrupt, leading the regulatory authority in the industry to intervene and safeguard supply for 15,300 residential customers and 8,400 business clients.
Administrators were brought in at the close of October following the company amassing £3 million in debt and being prohibited from taking on new clients since April. Since no bailout agreement materialized, Tomato Energy is now winding down its operations. However, Ofgem reassured today that its numerous customers will not face any interruptions in their energy services.
Rohan Churm, the director overseeing financial resilience and control, stated, “I want to assure Tomato Energy’s customers that there is no need for concern. Their energy supply will remain uninterrupted, and any credit on domestic customers’ accounts is safeguarded by Ofgem’s regulations.”
“We are swiftly working on appointing a new supplier for all current customers, who should refrain from switching providers in the interim. Once designated, the new supplier will communicate further details,” Churm added.
Ofgem will personally notify Tomato Energy customers once a supplier is selected to take over the supply. Customers will be placed on a default contract, which might entail higher costs but can be terminated at any time.
In light of nearly 30 companies collapsing in less than a year, energy suppliers are now mandated to maintain a financial safety net. While there has been a decline in company insolvencies since the implementation of the new regulations, Churm emphasized, “We have diligently enhanced the financial robustness of suppliers in recent times, enacting a set of regulations to help them withstand unforeseen challenges.”
“Nevertheless, in a competitive market, some companies may still face closure occasionally, and our primary focus is ensuring consumer protection in such scenarios while minimizing associated expenses,” Churm added.