Together Energy becomes latest UK supplier to go bust

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A city council-backed retail energy company in northern England became the 27th UK supplier to go bankrupt in six months as a result of supply shortages that pushed wholesale gas prices to record levels. ..

Together Energy RetailOfgem, a UK regulator, said in a statement that it had supplied to about 176,000 domestic customers with the support of the Warrington Council, but stopped trading on Tuesday.

Like other failed suppliers, Together’s clients are protected by Ofgem’s safety net scheme, which transfers customers to alternative providers through the auction process. Regulators said the safety net needs to ensure that energy supplies continue and that customers’ account balances are protected.

The collapse will increase pressure on the UK government as it seeks new ways to bring the rest of its suppliers to the surface. It also raises the question of why workers-controlled councils invested in deficit companies.

Taxpayers in the northern town of Warrington Economic blow Up to £ 52m.Congress bought 50% stake Founded in 2016 at Clydebank, Scotland, Together was founded in September 2019 for £ 18m.

He then set up a £ 20m worth of revolving credit line on Together and provided a £ 14m guarantee to its wholesale energy supplier Orsted.

Steven Broomhead, CEO of the Warrington Council, became Director of Together Energy in 2019 © John Hopkins / Alamy

Steven bloom head, The Chief Executive Officer of the Warrington Council was appointed to the Board of Directors of Together in October 2019. In 2020, the company acquired a domestic customer of Bristol Energy, another well-known council-based supplier founded by the Bristol City Council in 2015.

The Warrington Council said it had invested in Together to create local jobs and provide “100% green energy” to its customers, adding that it was “extremely disappointed.”

“We know that Together Energy’s operating model is resilient and the approach to hedging is very robust, but huge and sustained wholesale price increases now have to leave the market. It means being one of many companies. “

Even if Together delayed the creation £ 12.4 million payments and interest Thanks to Ofgem, the company has been optimistic about the outlook from this month.

At the beginning of January, the notification on the Together website was removed, but the customer’s account was stated to be “safe for us.” “Don’t worry, we run a very business as usual,” he said.

As competition in the retail energy market intensifies, many local councils want to invest in energy suppliers over the last decade to provide residents with better options than traditional “big six” energy companies. increase.

However, Congress-backed energy suppliers have often struggled to make a profit. The Nottingham Council has been forced to apologize for losing millions of dollars in public funding when its 2015 supplier Robin Hood Energy collapsed five years later.

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In 2019, when the Warrington Council made an investment, Together lost £ 11.4m and had net debt of over £ 19m.

In the company’s accounting for the previous fiscal year ending in August 2018, auditors have “significant uncertainty” that casts doubt on Together’s ability to continue its business if additional funding is not available. Warned that it exists.

Warrington’s conservative council immediately criticized the council’s involvement.

“Today’s announcement underscores the complete lack of worker expertise, due diligence, and oversight from the beginning of these high-risk investments,” said Councilor Mark Jarvis. “It is Warrington’s parliamentary taxpayers who have the financial impact.”

Additional report by Jim Pickard in London

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