Breeze Energy Closes - What Next for Customers?
As of 22nd December 2019, Breeze Energy has ceased trading, making it the 15th supplier to close its doors since the start of 2018. All 18,000 Breeze Energy customers will now be transferred to British Gas.
Why has Breeze Energy gone bust?
The closure of Breeze Energy will come as a shock to many - the supplier wasn’t showing any signs of financial struggle! Rather than lack of profit, it was Renewable Obligation Taxes that forced Breeze to close its doors.
The Renewables Obligation scheme places a requirement on energy suppliers to purchase a certain amount of their energy from renewable sources. To show they are meeting this obligation, they must present Renewable Obligation Certificates (ROCs) to Ofgem. When they do not present enough of these certificates in a given year, they are required to make a payment to the buy-out fund.
From 1st April to 31st March 2019, Breeze only purchased 8.9% of its energy from renewable sources (below the national average of 32.8%) and so didn’t provide Ofgem with sufficient ROCs. As a result, Ofgem presented the supplier with a bill of £486,200 plus interest.
The payment was originally due in September 2019. Breeze missed this deadline, assuring Ofgem it would be paid by the end of October. This delayed date was also missed, forcing Ofgem to issue a provisional order stating Breeze must make the full payment or be shut down. Breeze again failed to make the payment. Ofgem acted accordingly and shut the supplier down in December.
What does it mean for Breeze Energy customers?
British Gas has been appointed the Supplier of Last Resort, meaning all 18,000 Breeze customers will be transferred onto a British Gas tariff. During the transfer, Ofgem has promised customers’ energy supply will not be disrupted.
British Gas will reach out to all customers to confirm the transfer and/or provide more information about what will happen. The transfer process started on 22nd December 2019, so if you have not yet heard from the supplier, you should expect to hear from them in the next few days.
Until you’ve been contacted by British Gas, do not switch to another provider as this will make the process slower and more complicated. After British Gas has reached out to say the transfer is complete, you can choose to switch to another British Gas tariff or switch to a different supplier altogether.
All customers are advised to take meter readings to ensure you have up-to-date data for British Gas.
1. In credit with Breeze?
Any credit customers had with Breeze Energy will be honoured by British Gas, so you will not lose any money. It might take a bit of time to complete the process as British Gas needs to review all of Breeze’s records, but you will get back what you’re owed. This applies to customers who have recently left Breeze Energy but are still owed money.
2. In debt with Breeze?
Unfortunately for customers who owe Breeze Energy money, your debts will not be wiped clean. British Gas or Breeze Energy administrators will contact you to set up prepaymentarrangements.
3. Will my smart meter still work?
Smart meters should continue to function as normal during and after the transfer. If a problem is encountered, the supplier will contact affected customers to sort things out.
4. What will happen to my direct debit?
Customers who pay using direct debit do not need to cancel it. When British Gas get in touch, it will explain whether the existing direct debit can continue to be used of whether a new one needs to be set up.
5. What will happen to my switching process?
Breeze customers who started the process to switch from Breeze to a new supplier before it ceased trading need not worry - the switch to the new supplier will carry on as normal.
The same applies to customers who are in the middle of switching to Breeze Energy. The process will continue as planned, but you will be switched to British Gas instead of Breeze.
Will my energy bills be more expensive with British Gas?
Breeze Energy customers will be moved onto British Gas’s Cap Tracker Plus Sep 21 tariff. The price of this tariff is based on Ofgem’s energy price cap - it is at least £1.50 cheaper than the cap for each fuel. The price can change in line with the price cap, meaning if Ofgem chooses to increase it, the tariff will get more expensive.
Breeze was known for its economical pricing; British Gas is not. Even on this tariff, it’s likely that Breeze Energy customers will be paying more after the transfer to British Gas.
While this isn’t exactly good news, there is some light at the end of the tunnel. After the transfer, customers will not be tied into any contract with British Gas, meaning you will be free to switch supplier’s without facing any exit fees.
Unhappy with your new British Gas tariff and prices?Use our handy comparison tool to compare energy suppliers and find a better deal for you. Alternatively, you can give us a call on 02039 664692 (Monday to Friday 8am-8pm). We can offer expert advice and help you find a supplier and tariff that is right for you.
If you have any concerns or questions about the transfer process or your new tariff, feel free to contact British Gas on 033 202 9753 (Monday to Friday) or talk to a call agent via the live chat on the supplier’s website.
For more pressing concerns about your energy supply, you can contact Citizens Advice on 03454 040506 (Monday to Friday, 9am - 5pm), or reach out to them on Facebook or Twitter.
You can also find up-to-date information about what is going on and general advice on Ofgem’s website.
Breeze Energy is the ninth supplier to close down in 2019, and the 15th since the start of 2018. At Selectra, we promise to keep an eye on the market and how these closures affect British consumers so people can make informed decisions about their energy provider.