- Avro Energy closed with 580k domestic customers last week
- Last resort’s supplier sees big firms getting in touch with customers
- Octopus Energy now has 3.1m Energy customers
- We explain what former Avro customers need to know about the Switch
Offgame revealed today that nearly 580,000 home customers of collapsed firm Avro Energy have been transferred to Octopus.
The ongoing energy bill crisis has caused many firms to close and the watchdog’s Supplier of Last Resort has kicked off.
It is believed that there could be at least 10 suppliers who can survive the sharp rise in gas prices and good working margins.
Offgame said Avro customers will be moved to a new contract with Octopus starting today and that the challenging energy supplier will contact them to explain what happens next, including personal tariff information.
Saved: Octopus Energy takes on Avro customers from today – pictured, Prime Minister Boris Johnson visiting Octopus headquarters last October
Octopus, which is based in London, is also rumored to be interested in snatching up rival Bulb Energy, which has 1.7 million customers.
It has about 2.5 million subscribers ahead of today’s announcement, which will increase it to 3.1 million. It is the fifth largest supplier in terms of customers, and has been the most successful challenger to what is known as the ‘Big Six’.
Offgame says Avro customers can switch at no exit fee – but adds: ‘Our advice is not to switch immediately, but to wait until Octopus Energy is in contact with you. They will contact you with personal information about your tariff.
‘Your account will be fully established with them in the coming weeks or months. Once this is done, Octopus Energy will contact you at this point to confirm.’
It added that waiting for it to contact you would be the ‘easiest’ way for any credit balance customers have with Avro to be honored by Octopus.
The watchdog says: ‘The review process may take some time as Octopus Energy needs to obtain and review records from Avro Energy.
‘When calculating your credit balance, they will deduct any unbilled charges for your supplies by Avro Energy.
‘Current and former customers who have money owed, or are in debit to, Avro Energy should wait to hear from the administrators of Octopus Energy or Avro Energy who will speak to them about a repayment arrangement.’
Octopus said on its website: ‘We offered to take this responsibility because we believe our technology platform (Kraken) will make change as smooth and straightforward as possible for our customers.
“We have a strong track record in large customer migration and want to assure our customers that there will be no disruption or impact on their energy supply.
‘We are asking Avro customers not to contact Octopus Energy for now as we are loading their details onto our systems, and look forward to working with their administrators to make the process as seamless as possible. Will contact all Avro customers in the next 48 hours. Hours to tell what happens next.’
When customers move to a new supplier, they are placed on a special ‘deemed’ contract, which is a contract they have not chosen and not a fixed deal that they may have had before.
Deemed contracts can be more expensive because the supplier takes on more risk, for example, they may have to purchase additional bulk energy at short notice for new customers.
Hence, they charge more to compensate for it. As wholesale prices continue to rise, these contracts are likely to become costlier.
However, Offgame said it would try to get the best possible deal for customers.
While customers may switch once they have moved to a new supplier, it can be difficult to find a good price fixed deal in the current environment.
In fact, it may be worth moving to a default tariff, which is generally considered overpriced – for a typical household, the cap has been set at £1,277 per year as of 1 October.
The limit is based on the average dual fuel customer paying via direct debit – this means households can pay more than the cap based on usage.
Avro is the biggest crash of the current crisis so far. The next largest in terms of subscriber numbers is People’s Energy Company with 350,000 customers and Utility Points with 220,000.
British Gas has since taken on People’s Energy customers, and EDF has taken on Utility Point customers.
Questions have been raised about how closely new energy firms are scrutinized before they are allowed to trade.