Energy prices are rising by £30 a month for customers who have had to switch suppliers due to a spate of energy firm bankruptcies, with three more collapsing on Wednesday.
Rising gas prices have forced the regulator, Ofgem, to transfer 2 million consumer accounts to other energy providers this year. The regulator will be forced to shift 233,000 more customer accounts due to the failure of three more, with prices set to rise as a result.
According to Ofgem, Igloo Energy, Symbio Energy, and Enstroga have become the latest companies to fall to a growing problem that shows no signs of abating, with gas prices stubbornly high despite international shortages as winter approaches.
According to the regulator, customers would not experience any interruptions in their energy supply, who also stated that anyone having credit in those companies' accounts would not lose money.
However, it will have to find a new provider for roughly a quarter of a million people under its "supplier of last resort" system, allowing financially sound companies to take on clients from bankrupt competitors.
Those on cheaper fixed-rate plans, which tiny, new energy suppliers frequently employ to entice new clients, will see their bills rise to the government's energy cap, £1,277 for a household with average usage.
According to a Citizens Advice report released today, consumers who are switched to a new supplier often spend £30 more per month than they did previously. According to the charity's advisors, many people will confront fuel poverty this winter and will be forced to turn off their refrigerators and freezers, rely on hot-water bottles for warmth, and ask for help buying extra duvets and blankets.
"Overnight price hikes will be a shock for more than a million households whose energy companies have gone bust," Citizens Advice CEO Clare Moriarty warned. We're especially concerned about people who will be forced to make difficult decisions this winter due to the combined impact of rising bills, the projected decrease in universal credit, and inflation.
"The government and Ofgem must ensure that the warm home discount is maintained for people switching energy providers. People on low incomes should be able to apply for emergency winter funds to help them stay warm over the upcoming cold months."
Earlier this week, Shell Energy took on 255,000 customers from a failed smaller rival, Green, while Octopus Energy took on 580,000 consumers left stranded when Avro Energy failed.
Before the latest breakdowns were disclosed on Wednesday, over 2 million households were served by an energy firm that had gone bankrupt this year, driving Ofgem into a great scurry to keep the customer transfer system running.
"We know this is a worrying time for many people, and news of a supplier going out of business can be unsettling," said Neil Lawrence, director of retail at Ofgem.
"I want to reassure Enstroga, Igloo Energy, and Symbio Energy customers that they do not need to be concerned. We'll make sure your energy sources don't run out under our safety net. If you have credit on your Enstroga, Igloo Energy, or Symbio Energy account, the money you've paid is safe, and you won't lose any money you owe.
"Ofgem will choose a new supplier for you, and in the meantime, our advice is to wait until we appoint a new supplier and not to switch.
"Your energy supply will continue to function normally. When we've found a new supplier, we'll notify you, and they'll contact you regarding your rate. Customers who are having trouble paying their energy bills can contact their supplier for assistance."
With 179,000 subscribers, Igloo Energy is the largest of the companies that went bankrupt on Wednesday, followed by Symbio with 48,000 and Enstroga with 6,000.
Igloo said that high gas prices were to blame, as was the government's energy price ceiling, which it said was a good idea but was "designed to favor the largest suppliers."
