Energy Supplier collapse

Spark Energy, a specialist supplier to tenants in the Private Rented sector became the seventh supplier to collapse this year. Fortunately for many tenants OVO Energy has been selected by Ofgem to take over the Spark Energy brand.

Spark Energy acquired its largely private rental sector tenant customer base through letting agent referrals. Rental properties were either signed up to Spark Energy prior to or upon the commencement of a new tenancy. Lettings agents were then given a commission for this new account by Spark Energy.

The position now is that OVO Energy has taken over the Spark Energy brand and operating company. This means that customers that elect to remain with Spark Energy will continue to be billed by Spark Energy and will even continue to deal with Spark Energy’s customer service. OVO Energy will simply be in the background supplying energy without interruption.

For lettings agents that are owed commission or seek to continue receiving commission for any new referrals the position is not clear. Customers are told that materially speaking they will not notice a change and the energy supply will be uninterrupted. However, lettings agents may not find themselves in a similar position. It is unlikely that Spark Energy will continue to have the same commission arrangements as those prior to OVO Energy’s involvement. Therefore, lettings agents seeking commissions are advised to contact Spark Energy’s customer service department and request further information. Lettings agents are also warned that if they have specific clauses referring to Spark Energy in their tenancy agreements those clauses may also need amending.

Comment

This is not the first small energy supplier to cease trading recently. It seems to indicate that the energy market is a hostile environment for smaller suppliers, even where they have a specific target market which they serve.

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