Avro Energy and Green Supplier Limited have become the fourth and fifth energy suppliers to collapse this month, as rocketing gas prices piled pressure on the sector.
Ofgem said that it would ensure that Avro’s 580,000 domestic gas and electricity customers, and Green’s 255,000 households would be protected.
The regulator will choose a new supplier for the households, and said customers should wait to be contacted by their new supplier.
Read more: List of collapsed firms amid energy crisis
Together the suppliers represent a share of 2.9% of domestic customers in the market – Avro Energy 2% and Green Supplier Limited 0.9%.
Under Ofgem’s safety net, the energy supply of Avro Energy and Green Supplier Limited customers will continue and outstanding credit balances of domestic customers will be protected. Domestic customers will also be protected by the energy price cap when being switched to a new supplier.
“I want to reassure customers of Avro Energy and Green Supplier Limited that they do not need to worry. Under our safety net we’ll make sure your energy supplies continue,” Ofgem director of retail Neil Lawrence said.
“If you have credit on your Avro Energy or Green Supplier Limited account this is protected and you will not lose the money that is owed to you.”
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Green Supplier, which trades as Green Energy, which has around 180 staff at its Newcastle city centre base at The Core, is reported to be working with business advisors Alvarez & Marsal.
The firm’s chief executive Peter McGirr spoke out at the start of the week, claiming the Government had offered “no support” to struggling SMEs who were facing financial collapse, despite the prime minister’s pledge to help them navigate a “difficult period”.
Mr McGirr said at the time: “You don’t even need to look at the next six months, I would say the next three months will be curtains for us. We will not survive without any support.
“Unfortunately we will exhaust all our options in terms of raising finance unless there is an offer from the Government, which it doesn’t look like there will be.
“We will have no choice but to fold the company. At this present moment it feels like the business secretary is very happy with that.”
Avro and Green's failure come after energy companies PFP, MoneyPlus, Utility Point and People's Energy all exited the supply market in just over two weeks. Last month HUB Energy, which had just 6,000 customers, also stopped trading.
Together all the recently failed companies account for more than 5% of the market, around 1.5m customers.
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Justina Miltienyte, energy policy expert at Uswitch.com, said: “This is a double blow for the energy industry and will cause further worry for consumers.
“Soaring wholesale prices are making conditions difficult for all suppliers, but challenger brands in particular are struggling to make ends meet. Affected customers will be moved onto new suppliers appointed by Ofgem, but for now they should sit tight and wait until their account is transferred to the new provider before trying to switch.
“Customers can be reassured that their energy supply will continue as normal and any credit balances they have built up will be protected. We recommend that Avro and Green customers make a note of their meter readings now, and again when contacted by their new supplier, to ensure bills are accurate."
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