Gas and electricity provider Tomato Energy has gone out of business, prompting the regulatory authority in the sector to intervene and safeguard the energy supply for 15,300 residential and 8,400 commercial clients.
Administrators were brought in at the close of October following the company amassing debts amounting to £3 million and being prohibited from accepting new customers since April. Due to the absence of a rescue agreement, Tomato Energy is now shutting down. Nevertheless, Ofgem assured today that its numerous customers will not face any disruptions in their energy provision.
Rohan Churm, the director overseeing financial resilience and control, stated, “I want to assure Tomato Energy customers that there is no need for concern. Their energy supply will remain uninterrupted, and any outstanding credit on domestic customers’ accounts is safeguarded under Ofgem’s regulations.”
“We are swiftly progressing to designate a new supplier for all existing customers, and they should refrain from switching in the interim. Once appointed, the new supplier will provide further details,” he added.
Ofgem will communicate with Tomato Energy clients once a supplier has been selected to take over the provision. Customers will be placed on a “deemed” contract, which may entail higher costs but can be terminated at any moment.
Following the collapse of 30 firms in under a year, energy providers are now mandated to maintain a financial safety reserve. Since the implementation of these new regulations, fewer companies have gone bankrupt. However, Churm emphasized, “We have diligently enhanced the financial stability of suppliers in recent times by enacting a set of regulations to ensure they can endure unforeseen challenges.”
“Nevertheless, as with any competitive market, some companies may still face failure periodically, and our chief concern is ensuring consumer protection in such instances while minimizing associated expenses,” he concluded.
