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The spark has gone out of SPARK ENERGY

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Re: The spark has gone out of SPARK ENERGY

That may well be the case @Luzern, but your post does imply to me at least that you are advocating the purchase of a separate policy to safe guard yourself against the insolvency of the supplier.

And how do you know that the tariff levied against the supplier isn't risk related? And if the premium is paid to Ofgem as you say then the only one to benefit is Ofgem, well at least will the supplier is trading.

 

idonno
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Re: The spark has gone out of SPARK ENERGY

@Luzern What makes you so certain that a major utility supplier wouldn't go out of business. Just look up Enron but the hall of fame of big powerful companies suddenly crumbling can be found in every country.

 

The people affected by the latest failing aren't in great danger. Just means that if they are unhappy with whatever company Ofgem decide on, they need to go find another supplier. I certainly wouldn't be too bothered. The electricity will still come down the wires.

 

As for taking out an insurance policy, what would you hope to gain? You won't have any loss, so any insurance wouldn't pay out.

Marksfish
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Re: The spark has gone out of SPARK ENERGY


@idonno wrote: 

As for taking out an insurance policy, what would you hope to gain? You won't have any loss, so any insurance wouldn't pay out.


What about the people that have a credit balance? I build up a reserve over summer so that my payment doesn't have to go up in the winter to cover my increased usage. Currently the credit balance with my supplier is round £300, which by April/ May will have reduced considerably. If I were to lose that £300 today, it would place quite a extra burden on my monthly payments.

Mark

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Re: The spark has gone out of SPARK ENERGY

@Marksfish  From the original Daily Mirror page

 

 

Under Ofgem’s safety net, households will continue as normal for the time being, however the regulator is in talks for a takeover supplier to replace those affected.

The outstanding credit balances of domestic customers will be protected.

Ofgem’s advice to Spark Energy’s customers in the meantime is to not switch to another provider and take a meter reading ready for when your new supplier contacts you.

 

 

My bold...

 

So should not be a problem....

craigthepict
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Re: The spark has gone out of SPARK ENERGY

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Remember:

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- Prompt UK based customer service

Moderator's note by Adie (Dvorak) removed referral link as it’s against forum rules
Luzern
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Re: The spark has gone out of SPARK ENERGY

EmbarrassedEmbarrassedEmbarrassedEmbarrassedEmbarrassedEmbarrassedEmbarrassedEmbarrassed

I got it wrong.  Sorry. Had any of you any idea that's how it was?

 

Here are two replies from another forum I approached.

A

The way it works is this, the Supplier of Last Resort makes a Last Resort Supply Payment Claim which OFGEM ponders over and decides upon. 

When Co-Op Energy submitted their claim for the takeover of GB Energy customers, this is what OFGEM had to say;

As per the supply standard licence conditions regarding LRSP claims, CEL will be able to submit a claim to each relevant distribution network, based on the amounts we have consented to and each network’s share of the total premises served by the relevant networks, in each fuel respectively. We expect CEL to do this on the basis of the data on customer numbers contained within the network companies’ regulatory reporting packs. This has the advantage of being a data source that is transparent and consistent between gas and electricity.

https://www.ofgem.gov.uk/system/files/docs/2018/01/last_resort_supply_payment_claim_from_co-operativ...

So the answer is that the costs are allocated by share of premises supplied i.e. customer numbers.

   
   

B

There is not a pot of money that suppliers pay into "just in case" i.e there is no protection money being paid

It's a levy that applies to the distribution companies, where applicable. i.e. it is only collected where a SoLR makes a claim (that is approved by Ofgem)

The system was first used by the Co-op this year (for their take over of GB Energy custoners in late 2016), despite the SoLR process bing in place since 2001.

That's because Ofgem tries to appoint a SoLR that does not make any claim (i'e the supplier funds it themselves). To be fair, Co-op never gave such undertaking to waive the opportunity to claim, and there were some unusual additional costs the Co-op incurred in being the SoLR.
Co-op still paid 30% of the costs themselves.

What I'm saying is the process is so new, it's still being developed, but essentially the SoLR puts in a claim, Ofgem decide if it should be entertained, and if so, the costs are passed to the distribution companies (who ultimately charge the suppliers)
As distribution costs are normally agreed on a 8 year cycle, a derrogation needs to be agreed.

The estimated effect of the levy applied due to the Co-Op request for funds was estimated to be 0.08 pence per day, over 2 years.

How the supplier then passes that onto the end customer (i.e us) is up to them, if indeed they do pass it on. The daily standing charge would be the natural way to do this, but we know the traditional use of daily standing charges have been 'massaged' by suppliers with some charging customers nothing and others changing over £100 per year per fuel, so some may well need to reflect the charge in unit price (but of course, however they do it, those of us on a 2 year fixed tariff cannot be affected).

I don't know if anyone else other than the co-op has ever claimed yet, but as you can tell, it may not occur until about 18 months after the event. .... unless they gave Ofgem an undertaking to waive their right to apply as part of the auction process to become the SoLR, in which case no levy will be applied.

No one has to agree with my opinion, but in the time I have left a miracle would be nice.
idonno
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Re: The spark has gone out of SPARK ENERGY


@Marksfish wrote:

Currently the credit balance with my supplier is round £300, which by April/ May will have reduced considerably. If I were to lose that £300 today, it would place quite a extra burden on my monthly payments.

Mark


 

I hadn't considered that to be honest but then I tend to keep a tight rein of the level of payment that the suppliers set. A credit balance with a company of £300 to me would be way over the top. I'd be more inclined to keep that sort of money nearer to home in a dedicated bank / savings account (yes, I know savings rates aren't fantastic but every little helps) where you have control of it. If required one could set up a standing transfer between one account to it of X amount each month. Most my bills get out of kilter over a quarter is around £20 nowadays. The utility company might suggest a rise in payment levels but all I do is use my float (in the savings account) to pay off the excess and the utility company usually agrees that the monthly payment level stays the same. It's a win win. They get their money and I have control of what I spend.

 

I'm probably in a different game to you as I use heating oil. There are no duel fuel deals. While there are companies that do saving schemes, I've found the level they set to be way too high for me - it just guarantees them a profit. I just save what I think is a sensible amount each month (oil prices can go either way. I've paid as low as 27p/ltr, it's currently around 51p/ltr). Problem is I never know what the price will be when I need to top up.

 

As to electricity suppliers, I always look around when the deal ends. One doesn't save mega amounts once you've done a couple of switches. For instance my payments have increased by £2 a month compared to last year but I'm fixed for the next year with no early exit fees. Its customer service etc might be naff (haven't used it to be honest) but either way the electricity still comes down the wires and that is all that matters.

Marksfish
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Re: The spark has gone out of SPARK ENERGY

 


@shutter wrote:

 

Under Ofgem’s safety net, households will continue as normal for the time being, however the regulator is in talks for a takeover supplier to replace those affected.

The outstanding credit balances of domestic customers will be protected.

 


I missed that bit, thanks Thumbs Up

Luzern
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Re: The spark has gone out of SPARK ENERGY

From my doghouse!

How on earth did we get to this situation of so many failures? Are they down purely to economic circumstances, or government action/ interference with maximum charges?

Maybe, though, it could be that Ofgem has been too lax in its granting of licences, and monitoring. What I do know from elsewhere is that another industry the services the public, is that they're under a far stricter regime than our energy suppliers.

No one has to agree with my opinion, but in the time I have left a miracle would be nice.
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Re: The spark has gone out of SPARK ENERGY

I was with a company called Amarada many years ago, they went bust and I was automatically transferred to eon, I cannot remember if I was in credit or debt on my account but the point is there was no problem either with billing or my supply.

The whole system is a farce, if you look at these money saving websites you will see that the cheapest supplier changes by the month.

There does need to be more regulation about new companies entering the market but equally the government is trying to encourage more competition so may well decide not to change current regulations.

Bigger energy companies can stand to make a loss for longer periods than smaller companies, I even remember that for a short period even british gas were the cheapest company.

I suspect smaller companies enter the market offering cheap deals and at some point increase prices in the hope they will not lose too many customers but clearly that theory does not always work out for them.

Marksfish
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Re: The spark has gone out of SPARK ENERGY

And today we see another supplier stop trading, Economy Energy. Having recently been banned by Ofgem from taking on new customers, the business has now shut.

Luzern
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Re: The spark has gone out of SPARK ENERGY

Is anyone surprised?Roll eyes Under- capitalized start ups win come-on cheap prices for those who want everything cheap, so they can spend on beer and skittles, who moan when it belly ups.

OK some may have gone to such outfits in desperation, but certainly not all.

No one has to agree with my opinion, but in the time I have left a miracle would be nice.
JPN
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Re: The spark has gone out of SPARK ENERGY

I'm currently reviewing various suppliers with a view to changing contract at the end of the month.  The comparison website I've used puts up a number of companies that I've never heard of, so as a matter of course I look them up on the easily accessible and free to use Companies House website.  It is very revealing how little substance is behind some of these.  As an example take Avro Energy. The accounts filed for them show a fairly dramatic increase in creditors and debtors - what looks like millions of pounds worth of contracts for supplying and paying for energy. The balance sheet shows a modest (£200k) increase year-on-year. Interestingly the only shareholder is a 24yr old law graduate and what appears to be his dad was recently added as a director.

People's Energy seems to have a slightly more experienced team, but the crowdfunding finance model doesn't seem to suggest a strongly based company. 

Since none of these companies are expected to be involved with engineering works, or other 'hands on' activities, and are effectively  middlemen who need just a website, bank of phones,a workable business model and some marketing, then they probably don't need to be large conglomerates. It is however not surprising that many don't last the distance.

If you have the time and inclination, look up a few for yourselves.

https://beta.companieshouse.gov.uk/

 

Luzern
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Re: The spark has gone out of SPARK ENERGY

@JPN I have found the same, and without intending to be xenophobic, the directors have names from the realms of Scamdinavia. Let's put that well aside! It is said that startups are at biggest risk of failure in the first five years. Not infrequently nemesis lies in the attractive snare rapid expansion, aka overtrading, without sufficient financial and other resources to match. Certainly I'd not join schemes offered by such entities without seeing three years' accounts, lacking signs of such.

No one has to agree with my opinion, but in the time I have left a miracle would be nice.