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Big energy suppliers eye bankrupt provider's 160,000 customers

Published 28/11/2016, 17:00
© Reuters.  Big energy suppliers eye bankrupt provider's 160,000 customers
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By Karolin Schaps and Susanna Twidale

LONDON (Reuters) - Britain's biggest energy suppliers have submitted bids to take over 160,000 customers left behind by bankrupt energy provider GB Energy, which collapsed on Saturday after being caught out by rising market prices.

All of Britain's Big Six energy suppliers, EDF (PA:EDF) Energy, Innogy's Npower, E.ON, Scottish Power, SSE (LON:SSE) and Centrica's British Gas, have submitted bids in a tender run by regulator Ofgem to supply GB Energy's customers, sources familiar with the matter said.

Npower confirmed it had submitted a bid. Centrica (LON:CNA), EDF Energy, SSE, E.ON and Scottish Power declined to comment.

"We've had lots of interest (in the tender)," said a spokeswoman for Ofgem, which has up to 14 days to choose a new supplier for GB Energy's customers.

GB Energy said on Saturday that it was no longer trading after a quick rise in energy prices and its inability to forward buy energy meant its business had become untenable.

In recent months, energy suppliers had grown increasingly concerned about the possibility of a small supplier going under as wholesale power and gas prices have spiked ahead of the peak-demand period in winter.

"Those which don't have the backing of a large trading partner or their own generation sites could be vulnerable," said Juliet Davenport, chief executive of green energy supplier Good Energy, which has its own power production.

Good Energy has not submitted a bid to take over GB Energy customers, a spokesman said.

Many smaller energy providers, such as First Utility or Ovo Energy, have hired established trading businesses, in these two cases Shell (LON:RDSa), to run energy procurement and hedging.

Ofgem updated its rules last month, allowing any supplier stepping in to take over customers of a bankrupt supplier to recoup the cost of reimbursing outstanding customer credits by increasing energy bills.

Analysts at Moody's said they estimate GB Energy's customer deposits to be less than 10 million pounds.

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