Why Tomato Energy Went Bust and What It Means for You
Tomato Energy is no longer trading. After several months spent trying to secure new financial backing, the company has decided to stop operating and has now moved into administration. Around 23,000 customers, made up of households and businesses, will be moved to a different supplier under Ofgem’s Supplier of Last Resort (SoLR).
Ofgem has put its customer protection measures into action, which means no one will lose access to gas or electricity during the switch from Tomato to Ofgem's appointed supplier. All customer accounts will also be transferred automatically to the replacement supplier, and any credit that customers have built up will be fully protected, so there is no need to panic.
Whilst you wait, it is advisable that you…
1. Take a picture of your meter reading for both gas and electricity as soon as you can.
2. Refrain from switching suppliers until Ofgem can appoint a new supplier under its Supplier of Last Resort (SoLR) process.
3. Wait for Ofgem to get in contact with you regarding your energy supply and next steps. Be sure to stay on the lookout for an email or letter.
What are you protected by under ofgem's SoLR?
Undisturbed Energy Supply:
Your energy supply will not be interrupted with the switch to a new supplier covered by the SoLR.
Protected Credit Balance:
Your account credit is protected under Ofgem rules and will typically just be transferred to your new supplier. But it's always best to check this once you have access to your new account under the new supplier.
Energy Contract:
You will automatically be transferred over to the new supplier. This is all handled by Ofgem and its administrators. Therefore, you do not need to do anything. Once the switch has been done, you should take some time to look in the market for the best energy rates for your business, as the supplier Ofgem appoints may cost more than your previous contract. If you do switch to another supplier, there will be no exit fee.
What happened with Tomato Energy?
Tomato Energy had a number of financial problems that became too difficult to manage.
The company already had around £3 million of debt. On top of that, they had to pay a £1.5 million redress order from Ofgem for service and compliance issues. This left them with very little money to keep operating.
Energy supply in the UK is expensive and risky. Suppliers must keep enough funds to deal with changing wholesale prices, support customer credit balances and follow strict regulations. Tomato Energy did not have enough capital to cope with these pressures which is why they have now gone into liquidation.
Things to consider
Smaller suppliers that are not part of the Big Six can still be an excellent choice. Many offer attractive prices and strong customer service. When you are browsing your options, it is worth considering researching how long the supplier has been in business and whether they have a solid financial background, along with a whole host of other factors.
Ofgem has introduced stronger rules and protections to make sure customers are kept safe if a supplier fails, and that you are fully protected throughout the process. Even with these protections in place, it is still wise to choose a reliable supplier from the start. Having some knowledge about the energy market can go a long way in helping you select a company with a strong track record and pricing that suits your business needs.
How Can Purely Energy Help?
If you are a Tomato Energy customer and have any questions about what you should do next or dont want to pay additional out of contract charges. Don't hesitate to get in touch!
Contact us at 0161 521 3400 or Info@purelyenergy.co.uk. Alternatively, you can get a quick quote by filling in the box below.
Written by Harvey Rowlinson and Faith Labong at Purely Energy
