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British energy supplier Economy Energy ceases trading - regulator

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LONDON (Reuters) – British energy supplier Economy Energy has ceased trading, energy regulator Ofgem said on Tuesday, following the closure of eight peers last year.

The company has around 235,000 customers, who will now be appointed a new suppler by the regulator as quickly as possible, Ofgem said.

Any outstanding credit owed to customers will be protected and there would be no disruption to energy supplies, Ofgem said.

There are more than 60 smaller, independent energy suppliers in Britain which have attained a market share of about 30 percent at the expense of the big six suppliers in recent years.

Their rapid rise has led to questions over the viability of some of the companies, who with less capital available to make long-term hedges have been left vulnerable to soaring wholesale commodity price rises.

Firms are also under pressure following the implementation of price caps on the most widely used tariffs which came into effect on Jan. 1.

Eight small suppliers ceased trading last year, leading Ofgem to propose new rules under which suppliers would have to demonstrate they have adequate financial resources and can meet customer service obligations before they are awarded a licence.

(Reporting by Susanna Twidale; editing by Jason Neely)

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