Two more energy firms fell victim to the deepening price crisis yesterday.
Orbit Energy (Orbit) and Entice Energy (Entice) have ceased trading in the latest bleak chapter for the UK energy market.
Soaring wholesale costs have caused over 20 energy firms to collapse since September.
The decline of both suppliers means 70,000 more domestic customers have been left in the lurch this winter.
Approximately 65,000 customers from Orbit and 5,400 from Entice will now need to be rescued by Ofgem’s supplier of last resort process.
Under Ofgem’s safety net, domestic consumers will continue to receive energy supplies, while money already paid into accounts will be protected.
Neil Lawrence, director of retail at Ofgem, said customers “do not need to worry” and that the regulator will make sure energy supplies continue.
He 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 tariff.”
So far, four million customers have been affected by the collapse of energy firms across the UK.
Orbit criticised the government and Ofgem for imposing unfair market conditions on the firm, describing itself as a “well-run energy supplier”.
The company said: “Sadly, the UK government and our regulator Ofgem, expects us to sell energy at a price far lower than the cost to buy – which makes operating unsustainable. It is with a heavy heart that we are confirming to you, our loyal customers, to let you know that despite our best efforts, supplying energy to UK households is no longer viable.”
This outlook echoed statements from doomed supplier Bulb Energy (Bulb), the UK’s seventh biggest energy company which fell into special administration and de-facto nationalisation earlier this week.
Bulb revealed the £1,277 per year price cap limited customer charges to 70p per therm, even though it cost the battered energy supplier £4 per therm to provide for customers.
This means the energy price cap has severely limited the ability of companies to pass skyrocketing costs on to consumers – leaving them painfully exposed.
The government is now set to support Bulb and its administrators Teneo with £1.7bn in public money over the next six months until a buyer can be found for the firm and its 1.7m customers.
Industry leaders such as Scottish Power CEO Keith Anderson and Utilita Energy founder Bill Bullen have both called for the price cap to be reformed, while Utility Warehouse described the situation as a mess in its recent results update.
Even the architect of the price cap, John Penrose MP, has pushed for it to be overhauled.
He said the pricing measure had “completely failed” and was the “wrong type of price cap”.
Ofgem has committed to reviewing the price cap amid industry criticism, with findings from its review scheduled for February 2022.
Meanwhile the government told City A.M. on Monday after Bulb’s fall from grace, that it remains committed to the price cap.