By now you’ll have probably seen that energy prices are soaring, as wholesale prices for natural gas has gone up by 250% since January – and since August, up by 70%.
Power prices have shot up to £2,500 per megawatt-hour for spot electricity, too, compared to the typical baseload of £40 per megawatt-hour last year.
The climb in prices stems from a shortage of both electricity and gas, and smaller suppliers are struggling to stay afloat.
So what happens if your energy provider is a company that has gone bust? Here’s what you need to know.
It’s normal for some utility companies to go into liquidation during the winter months each year, business secretary Kwasi Kwarteng told the BBC Today Programme.
If yours is one of them, Ofgem, the government regulator for the electricity and natural gas markets in Great Britain, is duty bound to provide you with a new supplier.
How are you protected?
“We know that the current situation with high wholesale energy prices is putting pressure on customers and energy companies. This is a global issue,” an Ofgem spokesperson told Huffpost UK.
“We have the systems and processes in place to ensure that customer needs are always met. For those customers who are with energy companies that can no longer trade, a new supplier will be appointed. Ofgem is working closely with government to manage the wider implications of the global gas price increase.”
If you’re not happy with the deal or the provider you get in the switch, you will be able to shop around and move to a new one. And if you’re owed money from a previous supplier, it is protected and you should be able to get it back.
Ofgem added the assurance to customers that they are equipped to deal with multiple supplier failures.
“Where the appointment of a Supplier of Last Resort is not possible, for example where the size or characteristics of a supplier’s portfolio mean that it cannot be absorbed by another supplier, Ofgem and the Department for Business, Energy and Industrial Strategy have agreed processes in place to appoint a special administrator to temporarily run the business until such time as a new supplier can be found for the customers,” they said.
What to do if your energy supplier goes bust
We spoke to Citizens Advice, which has seen a surge of 9000% in views of its energy advice page in recent week.
There are only a few small things you have to do if your supplier goes bust:
Firstly, while it can take a few weeks for Ofgem to move you to a different supplier, your gas and electricity supply will continue in the meantime.
Your new supplier will contact you and it’s good to be prepared beforehand. Take a note of meter readings, keep old energy bills and make a note of your account balance.
Wait until your new supplier is appointed before cancelling any direct debits. This should make the transition easier.
“This is a hugely unsettling time for millions of energy customers,” Dame Clare Moriarty, Chief Executive of Citizens Advice, told Huffpost UK.
“It’s particularly worrying for many on the lowest incomes who’ll be facing the double whammy of rising fuel bills and a benefits cut, With choppy waters ahead, the single best thing the government can do is keep its lifeline of £20-a-week to Universal Credit.
“Ofgem must play its part and continue to provide support and protection – especially for those worried about their finances.”
This article originally appeared on HuffPost UK and has been updated.