Council-backed energy supplier Together Energy has ceased trading with immediate effect following weeks of speculation over its future.
The fallen firm blamed its demise on sustained wholesale price hikes, dismissing claims it failed to hedge properly.
It said: “Despite press reports, we did buy enough gas and electricity for your needs, but the sustained increase in wholesale prices and the securities required to continue to forward purchase the energy, have meant that it is untenable for us to continue.”
Together Energy is the 25th supplier to collapse since last September, amid a deepening energy crisis that has directly affected over four million customers.
Official word of its sinking follows increasing concern about its future, with Sky News first reporting that the firm was on the brink of collapse in November.
The energy firm is 50 per cent owned by Warrington Borough Council and home to 170,000 customers.
Its business also includes sub-brand Bristol Energy, which operates separately but has now also bitten the dust.
Currently, it employs around 250 people, with 100 per cent of its energy originating from renewable sources
It had been chasing funds with the help of Alvarez and Marsal, for the past two months, but failed to find any takers despite its attempts to find a route back to profitability after it reported a £4.2m pre-tax loss in 2020.
Ofgem will now designate a new energy firm for its customers through the supplier of last resort process.
The market regulator will protect consumers supplies, which will not be cut off at any time.
Any credit balance you have will also be transferred to the next supplier.
UK households are now bracing for potential 50 per cent price hikes as suppliers look to pass on increased wholesale costs.
The government is mulling over plans to mitigate rising costs for consumers, with loans to the energy sector and an expansion of the Warm Home Discount scheme being considered.
Richard Neudegg, head of regulation at Uswitch.com, said: “This is a stark reminder that the challenges posed to both providers and consumers by high wholesale gas prices is still a relevant and ongoing concern.”