An energy company serving approximately 12,000 households is facing potential collapse, as Tomato Energy has taken steps to appoint an administrator, as reported by The Sun. This action initiates a legal freeze to prevent creditors from pursuing legal actions for ten days. The notice was filed by Tomato Energy nine days ago after accumulating debts of £3 million and being prohibited from accepting new customers by energy regulator Ofgem in April.
Ofgem recently warned Tomato Energy of a possible £1.5 million penalty for failing to meet financial obligations. If an administrator assumes control, efforts will be made to address the outstanding debts. In the event that Tomato Energy cannot be rescued, it may cease operations, leading to the transfer of customers to a new supplier, a process previously conducted by Ofgem when energy providers have gone bankrupt.
The news arrives amid a rise in energy prices, with the Ofgem price cap for dual fuel households paying by direct debit increasing from £1,720 to £1,755. This price cap is effective until December 31 and applies to customers on standard variable rate tariffs. It is important to note that while there is a limit on the charges for gas and electricity units, the total bill is determined by individual energy consumption.
The Ofgem price cap specifies the maximum charges for gas and electricity units, including standing charges, fixed daily fees for energy network connection. The cap is based on typical annual consumption assumptions of 2,700 kWh of electricity and 11,500 kWh of gas for an average household.