Toto Energy is the 15th domestic energy supplier to go bust. This takes the total number of customers affected by energy supplier failures to 1.15 million. You can see the full list here.
Who is Toto Energy?
Toto Energy was a supplier of gas and electricity to domestic households in the UK, supplying around 134,000 customers.
Toto Energy offered a range of fixed, variable and smart meter gas and electricity tariffs.
Rather surprisingly, as recently as late July 2019, Toto Energy was still in expansion mode. It acquired around 44,000 customers from Solarplicity Supply Ltd, another energy supplier that was then on the brink of failing (and which subsequently did fail). Those customers are now facing the daunting situation of having to find a third energy supplier in as many months.
At the time a spokesperson for TOTO Energy said: “We want to assure customers who are moving to TOTO that their energy supply is secure and we are protecting their credit balances.” If you are one of these customers let us know if that worked by posting a comment at the bottom of the page.
Why did Toto Energy go bust?
A company becomes insolvent when it does not have enough 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 Toto Energy failed.
It is fair to say that warning signs for Toto Energy have been flashing for a while now. They include;
- A loss-making business with negative net assets.
- Compliance issues related to customer service failings.
- A company that was using all available routes to avoid filing their financial accounts – never a good sign.
- Being hit with a bill for £4.5 million pounds (plus interest) for unpaid Renewal Obligation charges. This is what probably finally tipped the scales.
What happens now?
Firstly, the good news. There is no immediate need to panic, your energy supply will continue as normal.
Ofgem, the energy regulator, will now pick an energy new supplier to take on Toto Energy customers following a Supplier of Last Resort (SOLR) process. The new energy supplier will be announced on the Ofgem website and will contact affected customers shortly after being appointed to confirm next steps.
I’m a Toto Energy customer – what should I do?
Ofgem’s advise is to stay put for now, until you have heard from the new supplier appointed to take over your energy supply. We would go along with that.
You should take a meter reading to ensure you are billed for the correct usage by both Toto Energy and the new energy supplier.
After that you need to wait a few days for the new energy supplier to be appointed and for them to contact you.
What happens to ex-Solarplicity customers?
If you are one of the 44,000 ex-Solarplicity customers recently transferred to Toto Energy then you must be feeling pretty fed up with the whole thing. You are in the same position as other Toto Energy customers and will be transferred again shortly. Three energy suppliers in 3 months is probably not what you wanted or expected. It’s not easy, but we would recommend being more careful about who you switch to going forwards.
My account with Toto Energy is 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”.
The new energy supplier appointed by Ofgem will be responsible for paying back any outstanding credit owed to you. When they contact you, they will explain how this will work.
These procedures seem to be working. However, there are also cases where customers have struggled to get their money back in a timely manner.
What happens to my old tariff?
Your energy supply contract with Toto Energy will end and so will your old tariff.
The new energy supplier 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?
That depends on the new energy supplier appointed by Ofgem and the energy deal they offer you. When appointed they will get in touch and tell you what the new rates are. Although Ofgem has a duty, amongst other things, to try and get you the best possible viable deal during the SoLR process there is nothing to prevent those new energy prices being a little, or even a lot, higher. We have seen situations where customers were put onto really expensive Standard Variable Rate tariffs.
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 Toto 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 Toto Energy, that is a little more complicated. It should continue but you will end up being switched again to whichever supplier takes over Toto Energy’s customers. Sucks, huh!
When should I consider switching energy supplier?
Once the new energy supplier 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 Toto Energy 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 by the new supplier who takes over your supply. 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.
Why did Toto Energy go bust? The gory details
A company becomes insolvent when it does not have enough 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 Toto Energy failed.
The signs for Toto Energy have not looked positive for a while now.
Customer Service and Complaints
In July 2018, Ofgem, the energy industry regulator, had compliance discussions with Toto Energy about “remedying deficiencies in its customer service arrangements that have made it difficult for its customers to make enquiries and complaints”
Furthermore, the company seems to have been using all available routes to avoid filing their financial accounts – this is rarely a good sign.
The company has not filed its Accounts at Companies House since 30 April 2017. Limited liability companies in the UK are required to file accounts annually with Companies House within 9 months of the financial year end. On that basis, accounts for the year end 30 April 2018 should have been filed by 31 January 2019 (some nine months ago). Let’s be clear. Toto Energy Limited was not late filing its financial accounts. However, it managed to achieve this only through a legitimate process of first extending and then shortening its accounting year-end date. It first extended its accounting period by 6 months to 31 October 2018 allowing it push back its filing deadline to 31 July 2019. Then, on 30 July 2019, it shortened its accounting period by 1 day, giving it a further 3 months in which to file those accounts.
So, what was Toto Energy Limited trying to hide? Alas, its accounts will remain unpublished. However, the administrator’s report will, in due course, give a good insight as to its state of affairs when it ceased trading.
The straw that finally broke the camel’s back however was the publication by Ofgem, on 1 October 2019, of a proposal to make a final order on Toto Energy to pay £4,555,880 (plus interest) in respect of unpaid Renewable Obligation commitments.
Based on accounts filed at Companies House, Toto Energy Limited owed creditors over £2m as at 30 April 2017 backed by assets of approx. £600,000 (excluding intangibles). This left a hole of over £1.4m on its balance sheet at a time when it was losing approximately £1m a year. The situation is a little more complicated in that there appears to be a number of controlling companies further up the chain. However, Toto Energy clearly didn’t have a spare £5 million lying around to pay its RO obligation. And, it seems, its backers were unwilling to pony up the cash. C’est la vie.
Are you a TOTO Energy customer? Are you an ex-Solarplicity Toto Energy customer? Has Toto Energy protected your credit balance? We’d love to hear your feedback stories so please leave us a comment below.
For the record…..
Remember, don’t get stranded with a lousy deal. Once your new supplier has told you what their best offer is make sure to check for yourself how it compares.
Or call us to get a free independent comparison over the phone…