Utility Point exits the Energy Supply Market
Utility Point has become the latest energy supplier to exit the market as a result of soaring wholesale energy costs and the impacts of Ofgem’s energy price cap.
What happened?
The Dorset based energy supplier Utility Point provided electricity and gas to hundreds of thousands of households across the UK but despite admirably riding out the massive challenges created by the Covid-19 pandemic the company has fallen victim to forces outside of its control.
Wholesale energy prices are at record highs and the impact on energy suppliers has been heavy.
Utility Point had been seeking new investors with the help of professional services firm Alvarez and Marsal but unfortunately, time ran out, not helped by record-high wholesale energy prices.
After being unable to find a buyer, Utility Point informed Ofgem that it will cease trading.
"Recent international and national circumstances have created a perfect storm of events in the energy market which has meant that Utility Point has not been able to find a buyer for its business.
"Wholesale energy prices have soared to record levels and with the added price cap on default tariffs, the costs of supplying energy have increased dramatically. With every supplier undercharging for energy means that the fair cost that the regulator was trying to encourage has in fact had the opposite effect.
"This mix of unfortunate circumstances and lack of commercialism in the industry made it impossible to continue. With great sadness, Utility Point will cease trading.
"Our priority is with our 200 colleagues in Poole and Bournemouth, who have fought hard in the face of tough challenges and helping 225,000 customers transfer to another energy provider with minimal disruption," said Ben Bolt, Utility Point’s chief executive.
Utility Point customers received this announcement further explaining the decision to exit the market.
A valued partner
“Dyball Associates has been a long time partner of Utility Point and this news is sad for all involved. We’ve supported Utility Point since their launch and have built close relationships with the team so naturally, our thoughts go out to their Board and the Utility Point staff,” said Dyball’s Managing Director Andy Dyball.
What happens next?
In the event of an energy supplier exiting the market, Ofgem will take over the process and assign a gas or electricity supply licensee to take over responsibility for the business’ customers. This occurs once Ofgem revokes the supplier’s licence.
Utility Point’s 225,000 customers will now be put into the Supplier of Last Resort (SoLR) process.
When it comes to choosing a SoLR the authority will assess to see which bidding licensee can support the additional customers without jeopardising the supply to its current customers. It must also be able to fulfil its other supplier obligations. If no suitable supplier wants to be a SoLR, Ofgem can use its powers to appoint a supplier without its consent.
Utility point is the seventh supplier forced to exit the market in 2021 along with PfP Energy, MoneyPlus Energy, Green Network Energy, Simplicity Energy, Hub Energy and People’s Energy.
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Further Reading
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Dyball Associates are proud to help new supply businesses successfully launch in the UK market.
Through our energy market consultancy services, and the software we’ve developed, we’re supporting new UK electricity and gas suppliers to get set up and start supplying.
For more information on how to start and manage an energy company, get in touch with Dyball Associates today.
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