CNG Energy Ltd announced yesterday that it would no longer be trading. The news comes amidst a global energy crisis that has seen more than 15 other UK energy suppliers go bust due to the dramatic rise in wholesale energy prices since September.
The collapse of CNG will affect around 41,000 non-domestic customers with many SMEs expected to suffer.
Will my supply be turned off now that CNG has ceased trading?
Yesterday, CNG tweeted, “CNG customers’ supply won’t be interrupted and Ofgem is moving you to a new supplier soon. This will happen automatically.”
Ofgem issued a statement following the collapse of CNG reassuring customers that, “Customers need not worry, their supplies are secure and funds that domestic customers have paid into their accounts will be protected if they are in credit.”
For customers, this means that Ofgem will automatically transfer them to a Supplier of Last Resort.
What does this mean for my tariff?
Whilst Ofgem have reassured customers that CNG’s closure will not affect their energy supply, the same cannot be said for their tariffs.
If you had an energy plan with CNG, you will not continue on the same tariff. Instead, you will be placed with a Supplier of Last resort on what is known as “deemed rates”.
What are Suppliers of Last Resort?
If a supplier ceases to trade, Ofgem will allocate a Supplier of Last Resort to supply gas and electricity to your business. This has become a common occurrence during the recent energy crisis, with many suppliers no longer being able to trade in a commercially viable manner.
What are deemed rates?
After your supplier has gone bust, you will be automatically transferred to Supplier of Last Resort on a deemed rates tariff.
Typically, deemed rates are significantly more expensive than contractual rates. If your tariff was with CNG, you should be prepared to face a significant increase in your energy bills. Unlike the energy price cap for household consumers, business consumers have no such protections; therefore, increases will likely be steep.
Can I Avoid Being Transferred to a Supplier of Last Resort?
While Ofgem’s advice has been to sit patiently and try and weather out the storm, this encourages idleness and could jeopardise the financial health of your business.
The collapse of CNG allows you to contact suppliers and find another contract whilst avoiding the contract exit fees. The continued energy crisis that has had a global impact looks likely to continue into the new year. This could leave you with months of exorbitant energy bills.
How Reduce My Costs can Help
At RMC, we have a wealth of industry specialists, connections with the leading energy suppliers and expertise in alternative fuel sources meaning that we can find you the most competitive tariff and help you avoid costly deemed rates.
Your dedicated account manager will work with you to understand what package you need before providing you a range of energy options. Contact RMC for a free consultation today, let us provide your business shelter from the ongoing energy storm.
