Energy crisis: here's what happened when my energy supplier collapsed

With more than a million households affected by energy firms going bust in the last month, I wanted to explain what to expect after going through the process myself last year.

More and more small energy suppliers are going under as a result of the ongoing energy crisis, leaving many households unsure of what will happen next to their energy bills.

At least half a dozen energy suppliers – with a total of around 1.5 million customers on their books – have collapsed in the last month, with more suppliers expected to go under in the coming weeks. 

If your energy supplier is among those to have gone to the wall, I will run through the next steps and what you can expect based on my experience after my supplier went under late last year.

But before I do, it's worth stressing a few key points that may be top of your list of worries:

• The energy watchdog, Ofgem, will automatically appoint you a new energy supplier;
• You will still receive energy while a new supplier is selected and the process may take a few weeks;
• Your bills may well rise once you are switched (especially if you are currently on a discounted tariff), but they won't go above the energy price cap;
• Any credit or debit that exists on your account with your current supplier will be automatically transferred;
• Don't cancel your Direct Debit until your new account is active;
• Do take meter readings now to ensure the switching process is simple and you have the data to hand should it be needed. 

So how might the process work for you? Here's what happened when my old supplier, Tonik Energy, went bust.

The downfall of Tonik Energy

Toink had been my energy supplier since the start of 2020, which then went under on 6 October.

The little-known firm had around 130,000 customers, and there were few details about precisely why it hit the wall. A statement on its website simply said that it had ceased to trade.

But what I found particularly interesting was that if I had a different job, I’d have had no idea. 

That's because I’m the sort of person that keeps up to date with energy market news ‒ I’m a riot at parties ‒ but obviously the vast majority of normal Brits do no such thing. 

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A new supplier arrives

Thankfully, there is no impact on your energy supply should your provider go bust.

Instead, Ofgem invites bids from other suppliers for your custom and then picks one who has offered a competitive tariff to take over that customer book.

And that’s what happened to me.

On 9 October, the watchdog announced that Scottish Power had been appointed to take over Tonik Energy’s thousands of customers, with the switch taking place on 10 October.

It added: “All outstanding credit balances, including money owed to both existing and former domestic customers of Tonik, will also be honoured. Scottish Power will absorb the costs of honouring customers’ credit balances and the migration of customers.”

Again though, I only knew this because I get press releases from Ofgem.

If I hadn't  – and didn’t read the money pages of the various nationals  – not only would I have had no clue that my energy supplier had collapsed, I’d have been none the wiser that I was being transferred to a new supplier either.

Action required

I eventually heard from Scottish Power on 14 October, which I didn’t think was too bad really.

The email arrived, declaring: ‘Action Required: Your Tonik Energy account has moved to ScottishPower’.

I had to supply meter readings, contact details and ‒ of course ‒ payment details so that I can complete the switch over.

While I understand the need to protect customer details, I do wonder if it’s a great idea relying on the customer to have to provide those payment details, rather than taking that information from Tonik Energy.

After all, I have no doubt that some people who received the email would have dismissed it as a scam attempt.

Since supplying those details, I haven’t heard anything from ScottishPower about my tariff and what sort of monthly bill I’ll be facing.

Can I switch again?

The good news is that, when you are moved between suppliers like this, there are no exit fees if you want to switch elsewhere  – although the advice from the regulator is to wait until the transfer is fully completed before you attempt to move somewhere else.

The bad news is you may well struggle to find a cheap new deal to switch to.

This is because most energy suppliers have pulled their competitive deals in response to soaring wholesale gas prices (to the point where one price comparison service, Compare the Market, has actually paused its energy service because it says there is a lack of competitive deals to choose from).

It's always worth looking around of course, but don't expect to be spoiled for choice.

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The auto-switching complication

Now, you may be asking yourself why I ended up with Tonik Energy in the first place, since they aren’t exactly a household name.

And it happened because, thoroughly sick of the process of manually shopping around and switching between energy deals every year or so, I decided to try out one of the many auto-switching services around.

The idea is that they carry out the searches for you each year, work out which one will be best value, and handle the switch on your behalf.

And in payment, they take the commission that would normally be paid to a comparison site.

I opted for weflip, which is part of the GoCompare family, back in January of last year.

For the first year it moved me to Zebra Energy, another supplier most of us would not be entirely familiar with, and then at the start of 2020, it contacted me about moving to Tonik.

Weflip told me that it has processes in place to contact customers of failed suppliers, to reassure them that they won’t lose their energy supply and advise them to hold tight until the switch to the new supplier goes through.

Then once that has happened, and weflip has details of your new tariff, it will start comparing the market again to see if it can find you a new, cheaper deal.

Unfortunately, I haven’t actually heard anything from weflip myself during this whole charade, which I’m told is because Tonik apparently cancelled my account back in June.

This is clearly a bit odd, given I’ve now been moved to ScottishPower, just like other Tonik customers. I’d expect I will hear from weflip again in the months ahead if and when a new deal is identified.

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Stress-free… sort of

It’s one thing to write about how seamless the process is when your energy supplier collapses, but it’s quite another to live through it.

In terms of the process, I can’t really complain.

Everything was handled without me being informed at any point ‒ other than supplying my details to ScottishPower, I’ve not had to do anything, which is ideal.

But I am a little uncomfortable with the lack of communication.

If your energy supplier collapses, you really should be informed of that fact ‒ and reassured that it won’t mean you suddenly can’t turn the lights on ‒ before you eventually hear from the new supplier you didn’t know you were being switched to, asking for your bank details.

Best of luck with your energy switch!