Iresa Energy Closure: Power Cuts, Price or Billing Hikes Ahead?
Iresa Energy was a gas and electricity supplier based in Nottingham that closed down in July 2018. Over 100,000 customers are affected by the closure. Octopus Energy has been chosen to take on Iresa's customers. OFGEM have advised against switching until the new supplier has contacted customers. This should be around the 1st of August 2018. Iresa Energy is the latest small energy supplier to close its doors leaving over 100,000 customers out in the cold.
The news doesn’t come as a shock to our energy experts who have been dealing with calls related to Iresa Energy for some time. Iresa has been under investigation by the industry regulator Ofgem since 2017 when they started having problems dealing with the large influx of customers brought to the company by their low prices.
Customers had problems contacting the energy firm with customers reporting having waited on the phone for up to two hours trying to contact a customer representative. The company was banned from taking on new customers until it got the situation under control.
Unfortunately, Iresa hasn’t managed to meet the targets set for them by Ofgem and so has been forced to close their doors.
Rob Salter-Church who is Ofgem's interim executive director, said: "If you are an Iresa customer there is no need to worry as we will make sure your energy supplies are secure and your credit balance is protected. Ofgem is working to choose a new supplier as quickly as possible for you. Whilst we're doing this our advice is to 'sit tight' and don't switch. Your energy supply will not be affected and will continue as normal - the thing that will change is that your energy will come from a new supplier.”
What will happen to Iresa Energy customers?
At the moment customers will have to play a little bit of a waiting game. Ofgem are currently advising customers to “sit tight” and wait until Octopus Energy contacts them before they take any action. The switch to Octopus Energy should be completed by the 21st of August.
Obviously, people affected by the energy company’s closure will want to take action as soon as possible but we would recommend following Ofgem’s advice and waiting until they receive notice from the new supplier before acting. There will be no interruption to your supply. You will be contacted by Octopus Energy with the details of your new tariff with them.
Your tariff will change
Customers won’t keep their old Iresa tariff. They will be moved onto the new company’s cheapest tariff. If you don’t do anything you will stay on this tariff until the end of your contract.
You will get back any money that you are owed
Iresa owes many of its customers money as mischarging was one of the problems that customers have had with the beleaguered company. Customers don’t need to worry about this money as Octopus Energy has said it will honor any of Iresa's credit on accounts before the switch.
However, if you are owed any kind of compensation from Iresa Energy you should contact the Iresa Energy administrators to resolve the situation.
The Ofgem safety net set up in 2016 guarantees that customers in this kind of situation will be kept safe. If customers have any problem with the new supplier and reclaiming money we would recommend contacting Citizens Advice or Ofgem to get some help resolving the situation.
You will still have to pay back debt
Debt won't be carried over to the new supplier. If your account is in debit Iresa's administrators will contact you to talk about repayment arrangements.
We wouldn’t recommend cancelling any direct debits until you have been contacted by Octopus Energy as it could mean that you end up with longer term debt problems. We understand that many customers have found themselves in debt with Iresa Energy due to poor management of accounts and underquoting but this is a problem which can be easily resolved with the right management.
It should be easy enough to organise a repayment plan so that you can pay back this debt. It is always better to pay off the debt as soon as possible if you can. Although it may seem counterintuitive, it is better to pay off the debt, even if you think it is unjust, and then begin a complaints procedure with the energy ombudsman Ofgem to try and get the money refunded to you.
This will give you more options to move to a more reputable supplier and cheaper deal and not end up in a debt spiral. For more advice on your debt situation you can get a callback and get some advice from one of our energy experts.
What if I want to switch supplier?
Customers who are already in the process of switching shouldn’t be affected by the closure and their switch should go through as normal.
Octopus Energy will contact you with the new conditions of their service to you. We would recommend at this point you should call them to make sure you are on the best value tariff.
The prices of the new tariff are probably going to be considerably higher than the prices you are paying with Iresa Energy. If you aren’t happy with the new supplier of if you would prefer to switch to a cheaper tariff, we would recommend getting some advice from a Selectra on which suppliers have reputable customer service and low prices before making another switch.