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Energy supply market in disarray as another firm fails
The energy sector is undergoing considerable change at the lower end of the market. Earlier this month OneSelect, a small domestic electricity supplier, became the eighth firm in the sector to stop trading this year.
OneSelect’s 36,000 customers were told to ‘keep calm and carry on’ while Ofgem appoints a new supplier to take them on.
Ofgem admits there have been ‘a number of supplier failures this year’ and is trying to reassure customers that their energy supply will be secure and credit balances protected.
However new suppliers typically charge a higher tariff when taking on customers from bust rivals.
OneSelect is the third supplier to fail in as many weeks and already had a reputation for poor service. Meanwhile its sister firm Energieflex had its licence revoked in the Netherlands in October.
Two other suppliers, Spark Energy and Extra Energy,
ceased trading within days of each other last month. Ofgem had announced it was investigating Spark Energy two days before it shut up shop.
The number of suppliers has ballooned to nearly 70 in the last decade. Customers who have chosen small suppliers on the basis of price may find that the bigger firms are the safest option in the long run.