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Together Energy: Council-backed gas and electricity provider collapses

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·Business Reporter, Yahoo Finance UK
·4-min read
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Council-backed supplier Together Energy collapses
Together Energy has become the latest UK energy supplier to go bust thanks to rising wholesale gas prices. Photo: Li Ying/Xinhua via Getty

Together Energy has become the latest UK energy supplier to go bust thanks to rising wholesale gas prices.

The collapse on Tuesday makes the council-backed company the 27th firm to go under since August last year.

Energy regulator Ofgem confirmed Together, which is half-owned by Warrington Borough Council in Cheshire, had ceased trading, along with its subsidiary Bristol Energy, affecting around 176,000 domestic customers. It also had one business customer.

Ofgem is approaching rival suppliers about taking on customers from Together and two smaller operators that are also expected to fail soon.

A statement on the Together website said: "We regret to inform you that the company will cease trading with immediate effect. We want to thank you sincerely for your custom over the past five years."

Together Energy’s financial difficulties first emerged earlier this month when Sky News revealed that the company could be insolvent within weeks without fresh funding.

At the time, a spokesman for Together said it was in "active conversations" regarding support, while is said in November that it was "looking to source strategic long-term funding for growth".

Read more: What to do if your energy company goes bust — as Avro Energy and Green collapse

It comes as wholesale gas prices have rocketed six-fold due to a global shortage of supplies.

Reasons behind the dramatic increase in power prices include low gas reserves, strong commodity and carbon prices, heightened global demand, and low wind output.

As well as soaring prices, the energy price cap has also been putting pressure on energy firms, which restricts what companies can charge consumers. This means energy is being sold for less than it is bought for.

The price cap on energy bills has risen £139 ($189) to £1,277 a year on average. Some experts have predicted it could increase from £400 by April to an excess of £1,600 per year, with consumers facing an unprecedented hike in bills without government intervention.

Britain’s energy regulator has set out plans that would allow it to more frequently adjust a price cap that limits electricity and gas bills for more than 15 million households.

Watch: Energy price cap shake-up could see households locked into six-month deals

"Ofgem's number one priority is to protect customers. We know this is a worrying time for many people and news of a supplier going out of business can be unsettling," Neil Lawrence, director of retail at Ofgem, said on Tuesday.

"I want to reassure affected customers that they do not need to worry, under our safety net we'll make sure your energy supplies continue."

He added: "Ofgem will choose a new supplier for you and while we are doing this our advice is to wait until we appoint a new supplier and do not switch in the meantime. You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your tariff.

"Any customer concerned about paying their energy bill should contact their supplier to access the range of support that is available."

Read more: Why 2021 was annus horribilis for gas and electricity companies

The biggest hit to the energy sector came in November last year, when Bulb, which is three times larger than any other firm that has failed so far, announced it would be put into administration.

Due to its size as the seventh-largest energy firm in Britain, Ofgem applied to put Bulb into special administration, meaning it will be run by administrator Teneo until a potential buyer is found, or until its 1.7 million customers switch to other suppliers.

Citizens Advice head of energy policy Gillian Cooper said: “Together Energy is the 27th energy supplier to have collapsed since August.

"As well as causing considerable disruption and confusion for customers, today's announcement will add to the £2.6bn bill consumers are already facing due to these failures.

"With the price cap expected to go up again in April and the cost of living soaring, many are already facing impossible choices between heating and eating."

Watch: Gas prices hit record high as industry calls for emergency help

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