Extra Energy collapse – what are your options?
If you’re one of the 108,000 domestic energy customers, or one of the 21,000 businesses who have their power supplied by Extra Energy, you may well be wondering what you do now the company has collapsed. Here's all you need to know.
Earlier in the year, around the time Iresa went under, we outlined what to do if your energy supplier goes bust - Ofgem has appointed Scottish Power as its preferred provider for Extra Energy Customers, and all contracts will be transferred as of Sunday, November 25.
What happens to your energy contract now?
If you had an energy contract with Extra Energy when it collapsed you’re contract has now been switched to Scottish Power. Ofgem appointed Scottish Power as the preferred provider on Sunday, November 25, and all switches will be complete within the next couple of weeks.
Scottish Power will be in touch to explain what happens next, and if you’ve not heard from them within a few days, you should give the Scottish Power Helpline a call on 0800 074 0471.
Your energy supply won’t be interrupted and you’ll continue to receive gas and electricity as normal, and if you have any outstanding credit balance, this will be protected.
If you paid your Extra Energy bills by Direct, don’t cancel it until you’ve heard from Scottish Power on what happens next. If you’ve already cancelled it, Scottish Power will be in touch to help you set up another payment arrangement on your account.
If you were owed compensation by Extra Energy, or had an outstanding complaint against the supplier, Scottish Power will not enter into any correspondence regarding this. If you’re owed compensation or have an ongoing complaint that hasn’t been resolved, contact Citizens Advice consumer helpline on 03454 040506 - Monday to Friday, 9am to 5pm.
It might also be worth getting in touch with the energy ombudsman on 0330 440 1624.
Can you switch energy supplier?
Ofgem is suggesting all domestic and business customers sit tight and wait for the switch to Scottish Power to go through – the switch will be completed within the next couple of weeks, and Scottish Power will be in touch to confirm when this has happened and ensure you have full access to your new account.
Although you’re free to switch supplier at any time, the regulator suggests hanging on until your new deal is up and running - if you try to switch away from Scottish Power before the transfer of your account is completed, the switch may not proceed or take longer to complete.
Once Scottish Power has been confirmed as your new supplier, THEN is the time to switch – it’s unlikely that the Scottish Power deal will be the best available, so make sure you compare and switch to a better deal as soon as possible.
What energy contract will you be switched to?
Scottish Power will be in touch regarding the terms of your new energy deal – be sure to make a note of your latest gas and electricity meter readings, so your new supplier can make sure your first billing period is accurate.
What if you were in credit with Extra Energy?
If you are in credit when your supplier goes bust, Ofgem says your new supplier should pay back any outstanding credit – Scottish Power has said it will honour outstanding credit balances for both current and past customers of Extra Energy who are still owed money.
Scottish Power will review the details of your account and will be in touch, but this may take a few weeks as it needs to receive and review records from Extra Energy. The money you are owed will be calculated by Extra Energy’s administrators, and any unbilled charges for your supply by Extra Energy will be deducted.
The same applies if you had already switched from Extra Energy, but had a credit balance when you left.
What if you owed Extra Energy money?
If your account was in debt when Extra Energy went bust, you’ll still have to pay any outstanding balance, and you may even find you’re not allowed to switch supplier until this is paid off. This will be dealt with by Extra Energy’s administrators, who will contact you directly to arrange repayments.
If you had a Direct Debit set up with Extra Energy, this will automatically be moved to your new supplier. If you cancelled your direct debit when you heard Extra Energy was going bust, your new supplier will be in touch to help you set up a new account.
What if you were already switching from Extra Energy?
If you were already in the process of switching from Extra Energy when it went bust, your switch will go through as normal.
If you have recently switched from Extra Energy, you may still be contacted by the supplier Ofgem subsequently appoints. When Iresa went bust, a glitch in the system meant some customers who left months before the collapse were still contacted and told they’d be switched to Octopus. So please do be patient.
Why did Extra Energy go bust?
Since the gas and electricity supply markets were opened up to competition, dozens of new suppliers have emerged - there are now 67 smaller suppliers battling it out with the Big Six, 13 of which entered the market in the year to June.
But while a growing number of suppliers offers greater choice, it also offers varying quality of service.
Extra Energy is the sixth energy firm to go bust this year, and Ofgem said it had opened investigations into 1,160 complaints about Extra Energy over the past 12 months - which sounds a lot like the situation Iresa found itself in before it went bust.
Extra Energy has blamed the government’s price cap as being at least partially to blame for its troubles, citing the cap has made the market unviable, particularly in light of the ever increasing wholesale prices.
Nick Read, chief executive of Extra Energy, said: "We have tried to restructure, merge and reduce costs in order to ensure the viability of our UK business. However, in light of the substantial UK regulatory change with the introduction of the price cap, we see no longterm investment opportunity in the UK market."
It’s unlikely Extra Energy will be the last supplier to go under, given how unforgiving the energy market is, but don’t let that put you off switching to a smaller operator if they offering the best deal – even if the worst does happen, Ofgem’s safety net means your supply won’t be cut off, and you’re free to switch to a new supplier at any time.
What if my energy supplier goes bust?
It’s not often that an energy supplier will go bust, but it can happen - this video shows what you need to do if your supplier suddenly stops trading
Click here to run an energy price comparison, and see if you could be paying less for your gas and electricity.