Toto Energy has officially ceased to trade, leaving 134,000 customers in limbo and becoming the latest of 16 small energy suppliers to go bust since January last year.
The company had been ordered to pay £4.5 million of outstanding Renewables Obligations fees by Ofgem by the end of October.
Robert Buckley head of retail and relationship development at Cornwall Insight said that it was “sad to see” another energy supplier fail.
“The Renewables Obligation (RO) deadline is looming, and Toto Energy was under scrutiny by Ofgem about its ability to pay its RO bill. Any shortfalls in the RO payments will be mutualised across the market and end up ultimately in consumer bills.”
Toto Energy had taken over 43,000 customers from Solarplicity in July this year, before the latter ceased to trade in August. Solarplicity was critical of Ofgem at the time, saying its “overly onerous interventions” had harmed the company and that the regulator had stopped two attempts to save the company.
Criticism arose of Toto Energy’s acquisition of Solarplicity customers, given the companies own struggles. The Energy Ombudsman has received 730 complaints against Toto this year, and received 794 in 2018.
Alex Dickson, head of research at Switchcraft, said: “That Toto Energy – a company with an appalling track record – was able to purchase 43,000 new customers only three months ago is dumbfounding.
“In one foul swoop Toto Energy has lumped bill-payers with £4.55m in outstanding green fees and doubled the regulators burden in terms of the supplier of last resort process.”
Ofgem recently suggested it should have greater power to step in when companies are going bust, and particularly when stronger companies acquire consumers from such companies leaving just the debt.
“We are . . . considering whether . . . there is a case for strengthening our powers to veto such transactions,” said Ofgem’s head of consumers and markets Mary Starks.
A review of Ofgem’s powers is now underway, to see whether it should have greater powers to step in when sales are not in the interest of the consumers.
Buckley said: “Ofgem is currently consulting on a monitoring framework for smaller energy suppliers. While events like this will increase the pressure for more robust rules for such companies, we do need to be careful that genuine innovation and new business models are not squeezed out.”
Ofgem’s Philippa Pickford said: “Toto Energy customers do not need to worry, as under our safety net we’ll make sure your energy supplies are secure and customers’ credit balances are protected.”
Gillian Guy, chief executive of Citizens Advice, said: “While measures announced yesterday by Ofgem will go some way to limiting the costs left behind when firms collapse, more action is needed.
“Toto Energy leaves behind £4.6million in unpaid bills for renewable energy development. Government should legislate to require suppliers to make these payments more regularly and stop firms being able to build up such sizeable debts.”
