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Is All Lost For Together Energy?

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The locally-funded energy supplier is facing problems as the energy crisis continues into 2022. If you are one of their 170,000 customers, read on to find out what’s going on with Together Energy.


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The ongoing energy crisis has seen Britain’s entire energy market experience its most turbulent time in its history. In 2021 alone, rising gas prices saw the closure of 26 energy suppliers, including significant names such as Bulb Energy and Avro Energy. Now, the crisis is set to claim another well-known victim, Together Energy.

Who Is Together Energy?

stopwatch

Together Energy is a Scottish energy firm based in Clydebank. It came onto the UK energy scene in 2016 amongst the surge in “challenger” companies to compete against the Big Six. Together Energy’s CEO is the former British Gas Executive Paul Richards, who co-founded the company.

Together Energy is a unique energy supplier in many ways. In September 2019, Warrington Borough Council, the local authority in Cheshire, invested £18 million into Together Energy for 50% ownership of its shares. The move was justified by the council leader Russ Bowden to “help people living in fuel poverty and generate income for the authority”.

Bristol Energy Acquisition

In May 2020, locally owned Bristol Energy was put up for sale by Bristol City Council. The customer base was divided up as the 4,000 business customers were sold to business energy supplier Yü Energy in August, and the domestic customers were acquired by Together Energy in September.

A Rocky Crisis

electricity calculator

Every UK energy company has been feeling the pressure since the energy crisis took a nasty turn in September 2021, yet some have weathered it better than others. While British Gas, EDF and Octopus Energy have managed to steady themselves against the tide, Together Energy has been struggling.

In November 2021, Together Energy was reportedly looking for fresh funding to steady itself. According to Sky News, the supplier had been working with Avro Energy’s administrators Alvarez & Marsal - a global professional services firm - to secure funding. In the same month, Together Energy delayed a £14.5 million payment to the energy regulator Ofgem.

Last Attempts at Funding Dashed

The hopes of Together Energy finding secure and long term investment are apparently running dry. Alvarez & Marsal are reportedly ending the search for an investor for the energy supplier, and it is very likely that Together Energy will go bust by the end of January. It is also rumoured that Warrington Borough Council will cease additional capital to Together Energy.

I’m a Together Energy Customer. What Do I Need To Know?

Together Energy’s collapse would impact 170,000 customers who rely on them for their electricity and gas. However, there is no indication that Together Energy’s withdrawal from the market would be any different to any other supplier failure we have seen so far.

It is likely that Together Energy’s customers will be transferred to another supplier appointed by Ofgem. This is a process known as Supplier of Last Resort (SoLR) that has served as the safety net for all bar one of the collapses we have witnessed over the last year. SoLR means that Together Energy's customer base will be transferred to a new supplier and those affected will receive updates on what’s going on.

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Will the Government Step In?

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Although a relatively small supplier with a smaller customer base, there is a possibility that SoLR won’t work with Together Energy’s administration. It may be the case that, since SoLR has been used repeatedly in a short period of time, possible candidates for taking on the customer base might find themselves too saturated to absorb another energy supplier’s balance sheet. 

If this is the case, Together Energy may be placed in a Special Administrative Regime (SAR) instead, where it will receive loans and funds from the government. This is exactly what happened with Bulb Energy’s collapse in November.

Should I Stay or Switch?

Ultimately, it is your decision. If you decide to stick with Together Energy, it is best to be informed about what is going on with your energy supplier so you can prepare for an eventual collapse. However, it is recommended that you make a switch as soon as possible so you have control over your supplier, rather than waiting for Ofgem to appoint a new one.

What Does This Mean for the UK Energy Market?

action plan under magnifying glass

Already the energy regulator Ofgem has been making preparations for the UK energy market’s future. In December, Ofgem published its action plan for 2022, outlining key steps it will take to restore confidence in consumers and prevent an energy crisis having the same impact again. The plan comes after serious criticism has been levelled against Ofgem for failing to deal with this crisis.

The action plan proposes:

  1. Stress testing
  2. Protecting customer balances
  3. Price cap reform
  4. Customer acquisition limits

For full details, check out our article on Ofgem’s Action Plan for 2022.

What About Local Authority Investments?

Generally, investments by local authorities in energy suppliers have not had the best track record. In 2020, the not-for-profit supplier Robinhood Energy, which was funded by the Nottingham City Council, collapsed and was acquired by British Gas, and in the same year, Bristol Energy was divided up.

Together Energy, as mentioned above, is 50% owned by Warrington Borough Council, and the recent news of Together Energy’s imminent demise has posed serious concerns over the use of public funds to invest in volatile markets, that ultimately the energy market has now become.

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