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Price Bailey, a top 30 accountant, found 14 electricity and gas suppliers are deemed “maximum risk” according to their credit score, meaning they could have difficulties accessing any emergency funding. The firm checked the Delphi credit scores of all the household electricity and gas supply licence holders registered with energy watchdog Ofgem. This excludes the so-called “Big Six” and two other firms whose credit scores were suppressed.
From the 29 companies that were focused on, 14 were deemed maximum risk, while 19 had above average credit risk scores.
Matt Howard, partner at Price Bailey, said: “The energy supply sector is facing complete carnage as we head into the winter months.
“Over a third of suppliers have already gone bust and another third are at imminent risk of going under in the coming months.”
This escalating crisis has resulted from a surge in the price of natural gas, which has jumped as much as six times in just over a year.
Nineteen energy suppliers have already gone out of businesses since the start of September.
The largest firm to cease trading so far is Avro Energy, with its 580,000 customers passed onto Octopus Energy.
In a huge barrier for companies, Britain’s price cap on energy bills stops them immediately passing those costs on to customers.
But experts fear the level of the price cap could surge by up to £400 when it is reset in April, meaning the average dual fuel household bill would jump to £1,677.
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Alarm bells will once again be raised among regulators, who have already had to move quickly to move more than two million customers to new suppliers after their own went bust.
There are increasing fears this safety net may not be able to hold on much longer as companies surviving the crisis become increasingly cautious at the high costs linked to taking on new customers under current wholesale prices.
Ofgem is asking companies to provide weekly updates on their financial status as part of increased efforts to be ready for any more collapses.
Last week, the energy watchdog ordered five energy suppliers to pay what they owe into a scheme to support small-scale renewable energy production or risk having their licences destroyed.
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It said the firms in question had missed Wednesday’s deadline to pay £575,000 into the feed-in tariff scheme, which is paid by suppliers to provide funds for small-scale producers of renewable energy
Ofgem said Orbit Energy has missed the largest payment, of more than £451,000.
The remaining four suppliers, who owe between £19,000 and £47,000 are Whoop Energy, Simply Your Energy/Entice, Social Energy Supply, and Delta Gas and Power.
The energy regulator said: “The five suppliers must now make the payments owed immediately.
“If the suppliers fail to comply with the order, Ofgem may take further enforcement action.
“They could end up having their licences revoked or face a financial penalty.”
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