Energy supplier collapses after market became ‘unviable’

An energy supplier based in Birmingham has ceased trading, the sixth small provider to go bust this year.

Extra Energy, headquartered in Edgbaston, is backed by Isreali businessman Moti Ben-Moshe and supplies gas and electricity to domestic and SME customers.

It launched in the UK in April 2014 and has around 108,000 domestic and 21,000 business customers.

Extra now joins Future Energy, National Gas and Power, Iresa, Gen4U and Usio Energy, who all ceased trading this year, with regulators now moving to make licensing tougher for new entrants to the market. There has been a flurry of new entrants in recent years as the government and the energy regulator sought to increase competition in the energy sector.

Extra Energy blamed the government’s recent introduction of a price cap on energy bills for “making the market unviable”.

“We have tried to restructure, merge and reduce costs in order to ensure the viability of our UK business,” chief executive Nick Read told BBC News.

“However, in light of the substantial UK regulatory change with the introduction of the price cap, we see no longterm investment opportunity in the UK market.”

The Energy Ombudsman said it had opened investigations into 1,160 complaints about Extra Energy over the past 12 months.

Energy regulator Ofgem said the energy supply of Extra Energy’s customers will continue as normal and the outstanding credit balances of domestic customers will be protected.

Ofgem will choose a new supplier to take on Extra Energy’s customers, which will contact these customers shortly after being appointed.

Its advice to Extra Energy’s customers in the meantime is to not switch to another energy supplier and to take a meter reading.

“This will make the process of transferring customers over to the chosen supplier, and paying back any outstanding credit balances, as smooth as possible,” it said.

Philippa Pickford, Ofgem’s interim director for future retail markets, said: “If you are an Extra Energy customer, under our safety net, we will make sure your energy supplies are secure. We will also ensure that domestic customers’ credit balances are protected.

“Ofgem will now choose a new supplier and ensure you get the best deal possible. Whilst we’re doing this our advice is to ‘sit tight’ and don’t switch. You can continue to 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 new tariff.”