Second small energy firm goes under in a week: Spark ceases trading and its 290,000 customers will fall into the watchdog’s safety net
- Spark ceases trading barely 48 hours after rival Extra Energy goes bust
- It becomes the seventh small energy supplier to cease trading this year
- Existing customers won’t be cut off and Ofgem will appoint a new supplier
Spark has become the second energy firm this week to cease trading, affecting up to 290,000 customers.
Following Extra Energy which collapsed on Wednesday, Spark cited ‘increasingly tough trading conditions’ in the energy industry as the reason for its closure.
The failure comes days after Spark missed a deadline to make a £14.4million renewable energy payment.
The energy supply of Spark’s customers will continue under Ofgem’s ‘safety net’ procedure, and the regulator will choose a new supplier and transfer accounts.
A Spark spokesman said that the company is still working to merge the parent firm and its workforce with a larger provider
The firm employs 400 people at its head office in Selkirk in the Scottish Borders. A spokesman said that the company is working to merge the parent firm and its workforce with a larger provider.
The spokesman said: ‘If successful, it would mean Spark becomes a standalone part of this large independent supplier, operating from our offices in Selkirk, Edinburgh and Horsham offices, supplying our customers under the new parent company’s licence.’
Founded in 2007, Spark has a turnover of more than £200million and around 15,000 broadband and telecoms customers.
It is the latest in a string of small energy firms to collapse, as they struggle with rising costs and low margins in a highly crowded marketplace.
Rival firms Extra Energy, Future Energy, National Gas and Power, Iresa Energy, Gen4U and Usio Energy have all gone bust in 2018.
Mary Starks, Ofgem’s executive director for consumers and markets, said: ‘Our message to energy customers with Spark is there is no need to worry, as under our safety net we will make sure your energy supplies are secure and your credit balance is protected.
‘Ofgem will now choose a new supplier and ensure you get the best deal possible. Whilst we’re doing this our advice is to ‘sit tight’ and don’t switch.
‘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 new tariff.
‘Although we have seen a number of supplier failures this year, our safety net procedures are working as they should to protect customers.’
The company has enlisted accountancy firm KPMG to assess all options for the firm, including an administration, according to The Press Association.
If you’re a customer of Spark:
Ofgem, the energy regulator, is appointing a new supplier for you.
Your energy supply will continue, uninterrupted. You won’t be cut off, and you don’t need to do anything at all in the meantime.
Any money and credit balance on your Spark account is safe and will be transferred to the new supplier, once selected by Ofgem.
When appointed, your new supplier will soon contact you to discuss any direct debit arrangements.