Eleven more energy suppliers are set to go bust with bills to soar to over £2,000 a year
NEARLY a dozen more energy suppliers are on the verge of collapse – meaning rising household bills are set to soar even higher.
That is according to accountancy firm Price Bailey which checked the credit risk scores of all domestic electricity and gas licensees registered with Ofgem, the regulator for electricity and gas markets.
Price Bailey found that 14 suppliers - nearly half those still in the market - are deemed “maximum risk”, which puts them at imminent risk of collapse.
Three have since failed, including Bulb – the seventh biggest supplier – which went into administration on Monday.
That leaves 11 teetering on the brink, Price Bailey confirmed.
More than 20 have collapsed since the start of September, affecting nearly 4million households.
Customers sucked into the chaos face the inconvenience of being transferred multiple times and significantly higher bills if they come off cheaper fixed tariffs.
The industry also has to shoulder the cost burden, which tends to be passed onto billpayers.
Most read in Money
It is estimated that a typical bill could rise to at least £2,000 next year, up from £1,277 as stands under the energy price cap. But 11 more failures would send bills up even more.
Price Bailey partner Matt Howard called the growing crisis “complete carnage”.
Mr Howard said: ";This time next year we will have far fewer suppliers and higher household energy bills.
"Every time a supplier goes bust the costs of the remaining suppliers increase, which makes those businesses more vulnerable."
He added: "It's possible that only one or two of the challenger brands will be left standing alongside the big six this time next year.
As surviving companies take on millions of customers from failing companies their profits are squeezed, which will mean prices will have to rise for the next 12 to 18 months."
The string of failures in the energy sector could end up costing the taxpayer billions, it was predicted today.
Andrew Lindsay, co-chief executive of Telecom Plus, which trades as Utility Warehouse, said: “Consumers face a cost running into billions of pounds to tidy up the mess.”
The next flashpoint is set to early December when regulator Ofgem has demanded that seven suppliers cough up for their renewables obligations – or have their licences revoked.
Ofgem said yesterday: “Each supplier will be considered on a case-by-case basis and further enforcement action will be taken as appropriate, which could result in a supplier having its licence revoked.
“Early next month we’ll publish the breakdown of suppliers and their payments on our website.”
One of them – Neef Energy – has already gone out of business.
read more on the sun
What happens if my energy supplier could go bust?
If your energy supplier goes bust then you won't be cut off, so there's no need to panic
You'll be moved to a new supplier under Ofgem's rules and you'll be contacted by the new supplier.
The new firm won't have to honour the deal you were on with your previous provider, but any credit on your account will be protected.
Experts like Martin Lewis' have advised customers not to rush to switch though, and instead "simply sit tight and wait to be contacted by a new supplier".
It's worth taking a metre reading though to give to your new supplier, and downloading any previous bills from the old supplier.
READ MORE SUN STORIES
Anyone worried about their supplier going under should avoid switching, as you would likely lose any fixed deal you're on meaning your energy bill would go up.
Since you'll be moved automatically and credit is protected, it's unlikely you'll be better off switching - and your current supplier could stay in business.
We pay for your stories!
Do you have a story for The Sun Money team?
Email us at [email protected]