Octopus Energy to take on customers from collapsed firm as market crisis continues
Octopus Energy (Octopus) has been selected by watchdog Ofgem to take on customers from another collapsed energy firm, the 30th to exit the market since last September.
Around 3,000 customers from UK Energy Incubator Hub (UKEIH), which trades as both Northumbria Energy and Neo Energy, have been transferred to Octopus – the UK’s fifth largest supplier.
UKEIH was served with a final order from Ofgem last week over ‘fit and proper’ person concerns, following three provisional orders against the firm earlier this year.
Customers will be transferred via the supplier of last resort process, which has already ferried over two million customers from fallen firms to surviving suppliers since the energy crisis began last year.
Octopus has previously used the process to take on Avro Energy’s customers, the second largest failed energy provider behind only Bulb Energy – which has been de-facto nationalised.
City A.M. understands from industry sources Octopus is still in contention for Bulb and its 1.6m customers, and is one of two remaining bidders alongside Masdar Energy.
Citizens Advice has estimated the overall bill for supplier failures, including the administration costs for Bulb Energy, now stands at £4.6bn.
This could mean customers would have to fork out an extra £164 per year on their energy bills to cover the clean-up costs.
This follows the National Audit Office’s estimates last month the supplier of last resort process will cost billpayers £2.7bn alone.
Meanwhile, energy specialist Cornwall Insight has hiked its forecasts for the price cap – putting more pressure on households this winter when energy demand is at its peak in the coldest months of the year.
It now expects the cap to rise to £3,244 this October, and to potentially £3,363 next January if the mechanism becomes quarterly.