More than 100,000 households without an energy supplier after Tonik goes bust

Around 130,000 households across Britain will need a new energy supplier after Tonik Energy failed on Tuesday, regulator Ofgem has said.

Officials said they were working to protect customers at Tonik, after it ceased to trade just a day after calling at least one customer to claw back money.

For now, customers will be able to sit tight, and Ofgem will appoint a new supplier to take over their accounts in a few weeks.

If customers do not like their new energy supplier, they will be able to change to another afterwards.

“Tonik Energy customers do not need to worry, as under our safety net we’ll make sure your energy supplies are secure and domestic customers’ credit balances are protected,” said Ofgem director of retail Philippa Pickford.

“Ofgem will now choose a new supplier for you and whilst we are doing this our advice is to ‘sit tight’ and don’t switch. You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your new tariff.”

The PA news agency has learnt that Tonik was scrambling as late as Monday evening to try to gather money from customers.

One former Tonik customer said that the company had overcharged them earlier this year, and after chasing Tonik for a refund the company returned the cash. But days later the customer received further unexpected payments totalling more than £200.

Having originally been told the over-payment was “compensation” for the delayed refund when they alerted Tonik to the error and offered to send it back, the customer – who wants to remain unnamed – was called on Monday evening and asked to repay it after all.

Tonik’s failure comes less than a week after it was identified as one of seven suppliers that had not paid a combined £34 million that they owed to Ofgem.

In the past, companies that have missed their so-called renewables obligation payments have often struggled to continue trading.

High-profile failures include Economy Energy, Solarplicity, and Spark Energy.

Tonik was one of seven suppliers named by Ofgem on Friday – a list that also included Co-Operative Energy Limited, Flow Energy Limited, MA Energy Limited, Nabuh Energy Limited, Robin Hood Energy Limited and Symbio Energy Limited.

On its website, Tonik said: “Tonik Energy… is ceasing to trade. Ofgem, the energy regulator, is appointing a new supplier for its customers.

“Customers need not worry, their supplies are secure and domestic credit balances are protected.”

Will Owen, energy expert at Uswitch.com, said: “There were warning signs last week as Ofgem started the process of pursuing Tonik Energy for £8.8 million owed due to renewable obligations and other payments.

“Many energy companies, particularly the smaller challenger brands, operate on thin profit margins. The Covid-19 lockdown has also resulted in many customers delaying or missing payments, leaving some suppliers without the cashflow to keep going day-to-day.”