What happens if your energy supplier goes out of business

Explains how a new energy supplier is chosen and how they will deal with your credit and debt, complaints and meter problems.

What we will do

If your energy supplier goes out of business because of financial problems, you will still have electricity and gas supplied to your home or business. Your energy supply will not be cut off.

If you have a prepayment meter, you can still top it up as usual.

You do not need to do anything. We will choose a new supplier for you. This could take up to 14 days.

You will be automatically transferred onto a tariff with the new supplier. You do not need to switch to another supplier or usually cancel your Direct Debit.

How we choose a new energy supplier

We will choose a new supplier through a bidding process. This is where energy companies bid to take on new customers.

We will also consider the type of energy originally supplied and who it was supplied to. For example, did the old supplier provide electricity or gas to homes only or businesses too.

The energy company that is chosen is called the supplier of last resort (SoLR). They will only be chosen if they can supply energy to the new customers, without affecting existing customers. They will also need to prove that they can arrange extra energy sources and take on new customers.

If an administrator takes over

If we cannot use the supplier of last resort process, we might apply for an Energy Supply Administration Order.

This means that an administrator is chosen to run the company of the energy supplier that has gone out of business. This is called a Special Administration Regime (SAR).

The special administrator will run the company until:

  • it is rescued, for example through restructuring
  • it is sold
  • its customers are moved to other suppliers

If an administrator takes over:

  • you do not need to do anything as your current supplier will contact you and explain what is happening
  • you will still get energy from your current supplier and be charged for it, so you do not need to cancel your Direct Debit
  • you can switch to another supplier if you want to without any exit fees
  • your credit balance will be protected unless you are a business

After we choose a new energy supplier

Once we choose a new supplier, they will contact you to:

  • tell you what has happened and that your old supplier is no longer trading
  • explain how they will manage your account and Direct Debit payments
  • let you know about any credit or debit balance you might have
  • let you know how you will get a refund on any money owed to you

Deemed contracts

Unless you agree to a different energy contract, you will be put on an energy contract for 6 months called a deemed contract. We will try to find you a deemed contract that is similar to your previous one. After 6 months, the deemed contract must go back to its normal rate.

You are still covered by the energy price cap even if you are put on a deemed contract and get energy supplied to your home. This means the supplier cannot charge you more than the maximum amount for a unit of energy and standing charge together.

You can ask your new supplier to put you on their cheapest tariff or switch to another supplier instead of a deemed contract. They cannot charge you an exit fee.

If you were already in the process of switching, you will still move to the supplier you chose.

Read how to switch your home energy supplier.

Read how to switch your business energy supplier.

What happens to your credit balance

Any extra money you pay for your energy household bills is kept in your account as credit. This money is usually paid back to you when your energy account closes.

If your supplier goes out of business, your credit balance is still protected by the rules we set. Your details will be given to your new supplier, and they will contact you about a refund.

If you are a business

Businesses are not protected in the same way. This is because the supplier’s administrator is responsible for managing their credit balance.

We will try and choose a new supplier who can cover all or some of the old supplier’s outstanding credit owed. However, businesses could potentially lose their credit balance and not receive a refund from the administrator.

What happens to your debt

If the new supplier transfers customer debts from your old supplier, you will need to pay them for your debt instead. They will usually contact you about setting up a payment plan.

If they do not make this arrangement, you may have to continue paying it back to your old supplier or their administrator who is running the company on their behalf.

Find out where to get support if you need help with your energy bills. 

Problems with your meter

Once a supplier has stopped trading, you may not be able to access your account details online.

You should take a meter reading as soon as you can. Keep a record of it to make sure you are billed correctly by the new supplier.

If it is difficult for you to take a meter reading yourself, try and ask someone else you trust such as a neighbour, family member or friend if you can.

See information on how to read your gas or electricity meter from Citizens Advice.

If you have a smart meter

Your meter may not work in smart mode when you move to the new supplier. If this happens, then you may need to take meter readings manually and submit them to your new supplier instead.

Your meter may work in smart mode again if you change tariffs or suppliers.

If you have a prepayment meter

The new supplier will give you information on how to get new key cards and tokens.

Get help from Citizens Advice or Energy Advice Scotland 

If you have a problem with your meter and need support, you can contact:

Complaints about your old energy supplier

If you made a complaint about your old supplier and it was not fixed, you can discuss the problem with your new supplier when they contact you. For example, a faulty meter or a problem with your bill.

They will review the complaint and check it is still relevant or whether it can be closed.

If you have a case open with the Energy Ombudsman, they will contact you to discuss next steps.

Find out where to get help with a complaint about your energy supplier or network operator.