Zog Energy becomes latest victim of the energy crisis and nearly 12,000 households will be switched to a new supplier
- Ipswich-based firm’s wholesale supplier Contract Natural Gas ceased trading
- Founder say they were left in an ‘untenable situation’ and are forced to close
Zog Energy has become the 24th energy supplier to go bust in 2021, leaving regulator Ofgem with 11,700 more customers to find an alternative provider.
Ipswich-based Zog’s collapse comes after the closure of its wholesale provider and follows the effective nationalisation of Bulb, which was placed into administration last week, as well as the closure of smaller providers such as Arvo Energy and Green.
UK energy providers continue to buckle under the weight of soaring wholesale energy prices, which far exceed what they are able to charge customers as a result of the Government’s price cap.
Zog customers customers’ energy supply will continue and funds that domestic customers have paid into their accounts will be protected
Zog’s founders told customers on Wednesday that it was ceasing trading despite their investment ‘in the best value technology to keep costs down and purchased our gas in advance from Contract Natural Gas to keep the promise we made to customers to supply simple cheap domestic gas’.
Its wholesale provider, Contract Natural Gas, has withdrawn from the market and ceased to trade, and Zog’s administrators were ‘unwilling to transfer the gas hedges we had previously agreed,’ the founders explained.
‘This has put us in an untenable position of having to purchase gas at the current market rate and we have no choice but to cease to trade.’
Zog customers customers’ energy supply will continue and funds that domestic customers have paid into their accounts will be protected, where they are in credit, Ofgem said.
Domestic customers will also be protected by the energy price cap when being switched to a new supplier.
The regulator told customers to take a meeting reading ready for when their new provider, which will be chosen by Ofgem, contacts them.
‘This will make the process of transferring customers over to the chosen supplier and honouring any funds that domestic customers have paid into their accounts, where they are in credit, as smooth as possible,’ it explained.
Director of retail at Ofgem Neil Lawrence said: ‘Ofgem’s number one priority is to protect customers. We know this is a worrying time for many people and news of a supplier going out of business can be unsettling.
‘I want to reassure affected customers that they do not need to worry, under our safety net we’ll make sure your energy supplies continue.
‘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 tariff.’