HELP! My Energy Provider Collapsed

Like over a million other people in the UK, I’ve just been informed that my gas/electricity provider has gone out of business! Prices on new tariffs have gone through the roof! What should I do?



A bit if background, I was with a colourful power company for just about a month and now they’ve gone bust. Our big old house is a massive heat sink – so getting cheap heat/power is important. Provider going bust? Not ideal, I know. So what should I do now?

There are three answers to this one – and you’ll not like either.

Answer 1: Do nothing

So what if you provider has gone bust. You’ll still get gas and electricity supplied to your house and it’ll all get sorted out. You might be pushed onto a new supplier at some point but you’ll not do too badly out of it – there is some consumer protection. Also, if you are a sensible person, you run a personal finance surplus meaning that you have the savings on hand and income exceeds your outgoings to not worry about this type of thing. And worry is bad for you, stress is a killer!

Answer 2: Reduce your consumption

If you are really worried about the cost of all of the energy that you use, try using less of it. This is a rather obvious option that people overlook. Why not look at how and where you use energy and where it’s lost and work to reduce it. Worrying does nothing – but thinking helps you take action. In just a few minutes you could find where you’ve drafts in your house and plug them – that’s saving you money right there. Other things like changing lightbulbs, improving insulation, getting a fancy thermostat (like I have) or installing more efficient heating (think heat pump which benefits from the RHI), solar panels etc. are on the cards – but perhaps coming up with a list of options and working out the cost/effort/benefit/return on investment and then using that to target your efforts is the way to do it.

Answer 3: Own the Means of Production

Being a consumer sucks – it costs you money and only gives you the illusion of choice. Of all the energy suppliers that there were in the UK, the actual gas and electricity supplied to you house doesn’t actually change. Prices may vary – that’s true but it’s the same stuff that you are using and the prices all go up/down depending on the wholesale markets. To insulate yourself against the cost of power – why not invest your money into power producers? I’ve written before about some of our investments in renewable energy – which may not have performed like super-hot US tech stocks – have given us a good return over the last few years (in a world where power prices were lower btw.)

Greencoat Wind (ticker LON:UKW) invests in windfarms in the UK and has a dividend yield of 5.15%. If your energy bills are £1,000 a year, then a £20,000 investment means that their dividend will cover your cost and if costs go up, then Greencoat’s revenues go up and you aren’t hurt by it. Ideal for those who can’t build their own windmill. Other funds are available.

You Smug Git

I know that this might come across as being a bit smug – but who cares. Yes there are millions struggling in the UK with the cost of living and bills going up hurts them. But I took steps years ago to mitigate and even profit from it. I also don’t have to really worry about money (and who wants to worry?) and if anything I should rejoice at higher prices because all of our windmills, anaerobic digesters, solar farms and hydro plants make us more money. How come “Joy for homeowners are house prices soar!” is a legitimate newspaper heading, but “Joy for homeowners as cost of living soars!” isn’t? Checking recent house prices, ours is up 14% in a year or around £35,000 – yet people are worrying about a few hundred quid extra on their heating bills – a bit of perspective please!

Taking Responsibility

There seems to be a train wreck of Black Swan events recently – maybe interconnected, maybe not. This current energy crunch was perhaps a logical outcome or came out of the blue. In any case, we all need to take responsibility for our own situation and not rely on/complain about the government doing or not doing something. Financial Independence gives you the strength in a monetary and psychological sense to withstand these challenges. Worrying about things without doing anything differently, making any changes or even trying is just a total waste of time. So with my energy provider and the current panic – I’m just to calmly wait it out.

Thanks, GFF.

4 Comments

  1. Mine’s gone bust too. The credit balance I’ve built up over the summer will help towards any higher bills. When my sis was living with me, she had the heating on all the time but now that it’s just me again, well I put on more clothes before putting the heating on.

    I got out of Greencoat recently (some articles I’d read on green energy prices didn’t sit right with me) but I guess when I look at the whole picture, the dividend income I get monthly more than covers my fuel bills so no point stressing about it.

    Like

  2. The worst case scenario is that you get moved to another supplier and end up in the price cap tariff. It may take some time to get any overpaid funds allocated to your account. Probably the worst thing you can do is attempt to start your own switch whilst your the bust supplier processes are ongoing.

    My partner and I have differing ideas of what an acceptable temperature is and this can cause issues.

    I did looked into solar panels and other efficiency measures but the payback period didn’t stack up. In the good old days I used to flip my energy supply often. With incentives and Topcashback payments I used to get my energy supplies really cheaply.

    It feels like everything is going up and whilst my household is only minimally impacted (due to decent financial planning) there will be many households who will really feel the impact.

    Liked by 1 person

    1. The price cap tariff isn’t all that bad and since I am still saving about 2-300 quid a month on petrol, it’s all relative.

      I’ve been changing provider for years to get the best deal – earlier this year my broadband provider paid me £150 cashback and then asked to up the price by inflation (~£1/month) so I dumped them and saved money with someone else plus get more cashback.
      This seems to be the way to do it.

      Like

  3. Companies really love loyal (lazy) customer who never switch. I’ve just taken back possession of my single rental property (long story) and I’m planning to keep it empty for a while. Capital appreciation will hopefully outweigh any extra costs and I really don’t need any tenant hassles for awhile. Time is more important than money.

    By signing up to an expensive energy tariff that provided £200 cashback and no exit charge I’ll have the standing charges covered for the next 6 months. Very little / if any energy will be used over the next 6 months so I’m effectively getting 6 months free.

    The price cap tariff will actually cost some suppliers more than they can charge so some suppliers are refusing to take on new customers. We live in interesting times.

    Liked by 1 person

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