Gas and electricity supplier Economy Energy has gone bust after its quest to secure rescue funding failed.
The Coventry-based company, which supplied energy to 235,000 customers, is the ninth small energy firm to go out of business in the last 12 months.
As reported by Sky News, Economy Energy began seeking rescue funds to avoid collapse last month, as the crisis that has engulfed the sector in the last year gained pace. The supplier’s problems were compounded when, just last week, it faced the prospect of having its licence revoked after it was banned by energy market regulator Ofgem from taking on new customers due to concerns over Economy Energy’s customer service.
Ofgem ordered the firm to “take steps to improve and expand” its customer contact procedures via email and webchat, address its billing and payment failures and issue customer refunds promptly. The industry watchdog took action due to the decline in the standards of Economy Energy’s customer service, its complaints handling processes and billing and payment procedures.
Ofgem also ordered the company to stop requesting one-off payments and increasing direct debits.
Following the company’s collapse, Ofgem said it will choose a new supplier to take on Economy Energy’s customer base “as quickly as possible”.
The watchdog added that energy supply to the group’s customer base will not be affected and that prepayment meters can continue to be topped up as usual.
Outstanding credit balances of domestic customers will also be protected, it said.
Philippa Pickford, Ofgem’s director for future retail markets, advised Economy Energy customers to “sit tight” and not switch suppliers, while Ofgem searched for a new dealer. She said: “You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your new tariff.