Breeze Energy is the 16th domestic energy supplier to go bust. This takes the total number of customers affected by domestic energy supplier failures to 1.17 million. Here is the full list energy suppliers that have gone bust.
Who is Breeze Energy?
Founded on 1 April 2015 (no joke) Breeze Energy was a supplier of gas and electricity to domestic households in the UK, supplying around 18,000 customers.
Unlike most energy suppliers, Breeze Energy kept their product offer really simple. They only offered a single competitive dual fuel tariff at any one time. They also got decent Trustpilot reviews although based on a very small sample of customers.
Why did Breeze Energy go bust?
A company becomes insolvent when it does not have sufficient assets to cover its debts and/or it cannot pay its debts on the due dates.
The administrators / liquidators report, which will be published in due course, will give us a detailed state of affairs of the business. In the meantime, here is our assessment of why Breeze Energy failed.
Unlike many of the failed suppliers littering the energy supplier graveyard, Breeze Energy wasn’t an obvious candidate for failure. It did share some common features, such as having only £1 if share capital and negative net assets. On the flip side it was profitable (in the year to March 2018) and had a reasonable amount of cash on its balance sheet.
What knocked Breeze Energy Supply Limited over was a bill, from energy regulator Ofgem, for £486,232.06 (including interest) in Renewable Obligation payments.
The Renewables Obligation (RO) is a mechanism to support renewable electricity generation projects in the UK. Energy suppliers obtain ROCs (Renewables Obligation Certificates) when they purchase electricity from renewable generators. Where suppliers do not present a sufficient number of ROCs to meet their obligation in a given year, they must pay an equivalent amount into a buy-out fund.
Breeze Energy’s fuel mix, the source of electricity supplied to its customers, for 31 March 2019, was well short on renewables. Renewables account for 32.8% of the overall UK fuel mix; for Breeze Energy it was only 8.9%. Therefore, they were required to make a significant (significant for Breeze Energy) payment into the buy-out fund. The deadline for that payment was 1 September 2019.
Having failed to make the payment on time, Breeze Energy gave Ofgem an assurance that the payments would be made by 31 October 2019. When the October deadline was missed, Ofgem issued a provisional order on Breeze Energy effectively calling in the cash under threat of shutting the business down. There were claims on Twitter that Breeze Energy had paid 75% of the bill – so that must be true right…?. The rest is history.
What happens now?
Firstly, the good news. Your energy supply will continue as normal so need to panic
Ofgem, the energy regulator, has appointed British Gas to take on Breeze Energy customers following a Supplier of Last Resort (SOLR) process. British Gas will contact affected customers to confirm next steps.
I’m a Breeze Energy customer – what should I do?
If you haven’t already done so, you should definitely take a meter reading to ensure you are billed for the correct usage by both Breeze Energy and British Gas.
And as soon as British Gas has been in touch to tell you what your new energy deal is you should do a comparison. If it makes sense then switch to get yourself a better energy deal.
My account with Breeze Energy was in credit – what should I do?
Under the Supplier of Last Resort (SOLR) provisions, customer deposits are protected. This is sometimes also referred to by Ofgem as their “safety net”.
British Gas will be responsible for paying back any outstanding credit owed to you. When they contact you, they will explain how this will work.
What happens to my old tariff?
Your energy supply contract with Breeze Energy has now ended and so will your old tariff.
British Gas will put you onto a ‘deemed’ contract (which means a contract you haven’t chosen). This contract will last for as long as you choose not to change it.
Will my energy bills go up?
British Gas hasn’t told us which tariff they will put you on but, given that Breeze Energy was very price competitive it is very likely that your energy prices, and your energy bill, will go up.
Once you know the details of the deal you’ve been offered, make sure you do a quick comparison to ensure you are not being ripped off.
I’m part way through a switch – what happens to me?
If you’re currently in the process of switching away from Breeze Energy, that will continue. The new supplier is responsible for the switch so you don’t need to do anything.
If you are switching to Breeze Energy, that is a little more complicated. It should continue but you will end up being switched again to British Gas.
When should I consider switching energy supplier?
Once British Gas has contacted you and you know the details of your new tariff, make sure you do a comparison.
IMPORTANT – you cannot be charged an exit fee for leaving your new deemed contract even if your old energy contract had not yet ended and had an exit fee attached. Your old contract with Breeze Energy Supply Limited ended when they ceased trading. Your new deemed contract cannot come with exit fees attached.
Remember, you do not have to accept any new energy deal you are offered British Gas. What you absolutely should do is a comparison to see how that deal stacks up. If necessary, leg it out of there. Pop your postcode into the box below to check online.
Or call us to get a free independent comparison over the phone…
Anything else I should know?
If you’d like to know more, we produced this detailed guide on What to do if your energy supplier goes bust. We hope that covers off just about every scenario we could think of. Enjoy.
Are you a Breeze Energy customer? Has British Gas Energy protected your credit balance? We’d love to hear your feedback so please leave us a comment below.
And for the record….