Pure Planet is the latest supplier in the list of failed companies that have gone bust in recent weeks as a result of soaring gas prices.
Andrew Ralston, Chris Alliott and Steven Day, Co-Founders of the company talked about the reasons behind the difficult decision to exit the energy market: “In our case, despite being hedged until next spring, and having had the backing of bp, Pure Planet faced increasing risks and large potential losses by continuing to operate in this market.
“Sadly, this led to bp taking a decision to withdraw its support and we are no longer able to continue.”
They said it seems illogical to see the government not support the supplier sector as it does with other energy-intensive companies, including steel, glass and paper sector: “Failure to have done so puts another 200 jobs at risk today and will cause disruption to our members who will now be moved to a supplier they did not choose.
“Kwasi Kwarteng says the price cap is non-negotiable. Fair enough. But that does not mean helping supply companies needs to be non-negotiable too. If he does not act fast, he will have no suppliers left to be Minister of.”
Earlier today Ofgem announced that Pure Planet and Colorado Energy ceased to trade, a move that is expected to affect an estimated 250,000 customers.
A BEIS spokesperson said: “The Energy Price Cap is in place to protect millions of customers from sudden increases in global gas prices. It is the best safety net available to protect consumers from instant, excessive price hikes.
“When suppliers do cease trading, we have a clear, well-rehearsed process in place to make sure customers are protected and supply is not interrupted.
“We will work with the industry to put them on a more stable footing in the longer term and that means continuing to build a robust domestic renewable energy sector so that we are not as exposed to volatile global gas prices.”
A few days ago, Business Secretary Kwasi Kwarteng said: “Firstly, the government will not be bailing out failed companies. There will be no rewards for failure or mismanagement.
“The taxpayer should not be expected to prop-up companies who have poor business models and are not resilient to fluctuations in price. Secondly, customers, especially and most particularly vulnerable customers, must be protected from price spikes.”
In an announcement, bp said: “We informed Pure Planet that we intend to end our wholesale gas and power supply arrangement with them. We worked hard to avoid this unfortunate outcome but were unable to reach a satisfactory solution to the market and policy issues facing Pure Planet.
“bp has been a minority shareholder in Pure Planet for five years. During that time, we have worked diligently to support Pure Planet and provide financial support through our wholesale supply and other working capital arrangements.
“However, despite considerable work over an extended period, we concluded it is no longer commercially viable for bp to continue this relationship and took this difficult decision.”