It comes after ministers ruled out stepping in to prop up companies who are struggling to shoulder the costs of rising gas prices which, in the UK, closed at an all-time high on Monday
A small energy supplier with around 250,000 customers has entered crisis talks after the industry warned four firms will collapse this week due to soaring wholesale prices.
Green Energy is understood to be facing insolvency, following on from Utility Point which collapsed last week.
It comes after ministers ruled out stepping in to prop up companies who are struggling to shoulder the costs of rising gas prices which, in the UK, closed at an all-time high on Monday.
Green is working with Alvarez & Marsal (A&M) to coordinate plans to use Ofgem’s Supplier of Last Resort (SOLR) mechanism, Sky News reports.
It said an administration of Green is possible within days, and is expected to be followed by many more.
Employing close to 200 people, Green chief executive Peter McGirr had warned publicly that the company would fail within three months unless it received state support.
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However any bailouts are understood to have been ruled out, with the government instead seeking to extend state-backed loans to larger energy companies who take on customers from failed suppliers – which includes honouring any credit on their accounts.
But even so, business secretary Kwasi Kwarteng yesterday said he could not guarantee that the vulnerable £140 Warm Home Discount will remain if people are pushed onto an alternative supplier.
In the past week, businesses including Utility Point and PfP Energy have stopped trading, with dozens more at risk of following suit.
But the Prime Minister says the energy crisis is only a ‘short-term problem’ and denied that the country is experiencing a gas shortage.
Green, which declined to comment, was the organiser of a letter from 15 smaller suppliers earlier this week which criticised both Mr Kwarteng and Ofgem for failing to engage with them.
The group of smaller suppliers said they felt ignored by the government, even as wholesale gas prices had surged by 70% since the announcement of the revised Ofgem price cap.
On Monday, calls to lift the price cap were written off by the government – suspending it next year would have allowed firms to hike prices at an unlimited rate to claw back cash from households.
The letter said that Ofgem was “currently unfit to regulate an industry they have appeared to have a vested interest in or turning a blind eye to the market returning to a selective monopoly and a reduction in competition”.
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