Market loses supplier after wholesale price risePublished on 21/12/2016
When Open Electric went into administration last Thursday it was the end of the road for the small Belfast based company.
Their supply licence was revoked which meant they could not continue to sell electricity. Their 1,100 customers have been transferred to Power NI.
These households can choose to remain there or move on. However former Open Electric customers who want to leave their new supplier will have to wait 20 working days before doing so.
The statements issued by the Energy Regulator and Power NI give no information about the background to the demise of Open Electric. The firm itself has yet to issue a statement.
Open Electric started up in business just over a year ago at roughly the same time as Click Energy. However while Click Energy managed to attract around 12,000 customers, Open Electric only secured a tenth of that figure.
Further bad news came with the hike in wholesale prices in October. The cost of a MWh of electricity jumped from around £30 to £50. That translates into a two pence increase in the price of a unit of power.
Until recently all companies decided to tough it out holding off increasing prices. It will have been easier for those who have deep pockets or have hedged against price shocks but smaller firms which have less access to such insurance will almost certainly have been finding it difficult making money in these market conditions.
Budget Energy to a degree has broken ranks recently by withdrawing its best offers though it maintains its standard tariff has not changed. Those on offers have been offered a choice of just two deals. If they wish, they are free to change supplier without facing a penalty.
The fact remains however that if wholesale prices remain at these higher levels, many current deals are not sustainable even for those who have hedged because eventually all hedges run out.
It looks increasingly likely that prices will rise in early 2017 though some firms may well hold off for a few months into the New Year.