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Pure Planet response to the energy crisis

  • 20 September 2021
  • 434 replies
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Pure Planet response to the energy crisis

Hi everyone, 

Right now, energy suppliers are being forced to make a loss. That’s because the relatively low Ofgem price cap doesn’t cover the true cost of wholesale energy, which continues to rise steeply. 

Sadly, that means a number of energy suppliers have ceased trading, and it’s likely that a number more will do so in the coming weeks and months.

We are involved in various industry conversations to help us all get through this energy crisis together, and will keep you updated as these conversations progress.

The steep, unprecedented rise in wholesale energy prices over the last few months has forced all suppliers to increase the cost of their tariffs. 

We understand that any increase to price is unwelcome, especially when things are already hard for many of us, but we remain committed to providing the best service and value we can for our Members. 

If you’re worried about paying your energy bills, it’s important you let us know. You’re not alone and help is available. You can get in touch through ‘help’ > ‘ask a question’, in your app or when logged in at purepla.net. And, you can find information on the support available from the government and from charities over on our blog.

What about the supply of energy to my home?

At Pure Planet, we buy our Members’ energy in advance – this is known as hedging. We feel we’re well hedged for the winter, which means we have the energy we expect our Members will need until spring covered.  If you are on a fixed tariff, all of the energy we expect you to need for the duration of your contract has been bought up ahead on your behalf. 

Just to be clear, the physical supply of electricity and gas to your home is NOT dependent on your supplier. Energy supplies to domestic energy consumers continues, whether or not the supplier has previously purchased energy on your behalf or even for those who are with a supplier that ceases to trade. If you have any concerns about this, please refer to the regulator, Ofgem’s website, which can be found here.


We’ll be sure to update this post as the situation progresses. 

If you have any questions please add them to the replies below.

24 September - update

Hi everyone, 

It’s been a few days since we posted our response to the current energy market, so I just wanted to provide you with a quick update before the weekend.

Really, we’d like to reassure you that all of us at PP will continue supporting our Members through this challenging time. We’re making our voice, and the voices of our Members, heard in various industry conversations and with the Government, to help us get through this together and build a better future for all. 
If you have any questions please post them in the replies below - happy to help answer them as best we can! 

I also wanted to take this moment to say a quick thank you to our wonderful Community Members who are continuing to support each other and provide excellent advice throughout what’s been a worrying time for many people - it’s truly appreciated not just by us Community Managers, but by the whole PP team.:green_heart:

7 October - update

We’re seeing record amounts of contact right now due to the challenges in the energy market, and it’s taking anywhere from a day up to several weeks for our team to respond. This is absolutely not where we want to be, and we apologise for any inconvenience caused. We’re working hard to get things back to where they should be, and really appreciate your patience in the meantime.

A few ways you can help us help you during this time are by:

  • Checking to see if your question’s been answered right here in the Community, or in our FAQs
  • Getting in touch with WattBot (‘help’ > ‘ask a question’), who may be able to answer your query
  • Refraining from contacting us more than once with the same question – our team is working really hard to get round to you, and will be in touch as soon as they can

Thanks for your patience while we work hard to get things back to where they should be.

 

Update Wednesday 13 Oct 2021.


See statement here - Pure Planet is ceasing to trade. Closing this thread.


This topic has been closed for comments

434 replies

Userlevel 7
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Energy market in crisis...more energy firms to go bust and comparison website(s?) refusing to quote...

The BBC claim to know or think that 4 more suppliers will go under this week. and C.T.M won’t quote.

 

 

What’s the situation with Pure Planet anyone know?

There is some shaking out ahead which will affect all of us as we, the customer, are  paying for the baling out that occurs. The article @woz quotes from, I think it is the same one, also says:

“At the beginning of 2021 there were 70 energy suppliers in the UK. Industry sources say there may be as few as 10 left by the end of the year.”

Some of us are on a fixed tariff but that has no benefits if the company withdraws from the market, i.e. collapses. Let us hope PP pulled some of its tariffs in good time so as not to be committed to supplying energy at prices less than it buys it for. Albeit it will have made forward purchases to support fixed tariffs.

If we had invested more in nuclear power years ago we would not be facing this dilemma. Indeed, we would not be using gas.

As Winter comes keep an eye on your neighbours, some may struggle to meet their energy costs.

I assume that the current variable rate equals the cap, although the ofgem site says that certain green tariffs are exempt from the cap.

 

But I wouldn't be surprised if ofgem raises the cap again in the next few weeks.  It's currently the most competitive tariff on the market!

Hi

Can anyone please confirm if the Ofgem price cap applies to the 100% green variable tariff? 

 

Thanks in advance

Userlevel 7
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Hi

It would appear so, it applies to all suppliers' variable tariffs. 

Hi

 

Thanks for the reply.

 

I’m doing some research and getting mixed messages. Some sources online mention that Pure Planet

had an exemption from the Ofgem cap until Sept 2020  (but I can’t find anything relating to the current situation)

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What’s the situation with Pure Planet anyone know?

No one “knows” anything, and the BBC are in my opinion irresponsible putting out a headline like that, it just causes more panic to no avail.  and it was  the main headline on the 22:00 news!

They should in my opinion have simply written that more suppliers were likely to fail because of price volatility, rather than saying 4 suppliers were going to fail.

The pulling of the 24 month tariff and the seemingly expensive 12 months fix which everyone is shocked by or complaining about, gives me more confidence that PP aren’t likely to be one but who knows? 

 The companies who continue to offer tariffs which are cheaper and where they’ll have to pay more for the energy than they sell it for are the ones who are going to fail. It’s become a hedging game which is not a stable environment for an energy supply platform because the small providers can’t compete with the deep pockets of the big ones. What’s more it’s anti-competetive. They  (smaller companies) are failing because they are  mismanaged in part but it simply is not possible to “manage” a broken market which (sadly) is working exactly as it was intended to work.

Many of the previous failures have left a string of Rego’s unpaid, if these were PLC’c the directors would be struck off. Plus it  makes a complete nonsense of the already flawed and abused Rego system. 
Does that mean that customers with green companies were buying dirty energy if the Regos were defaulted on?

I digress...

Add these up:

Higher demand**
Restricted Russian output (see later)
Less wind
Lower Nuclear generation capacity
Broken interconnects
Transport Issues
Covid
Brexit
Climate change
*Incompetent government
*Poor Planning
*Lack of infrastructure investment
**Poor insulation planning rules

= volatile and huge gas prices

I think we’re all in for a rough ride one way or another.

I’ll answer your question with a question, if you were more sure than not that your energy provider was going under what could you do anyway? The only sensible  move would be to fix with one of the big 6. (which is probably where you’ll end up anyway if your provider goes under). - and your balance is protected by Ofgem  anyway although the fact that your prices aren’t protected appears to have been conveniently overlooked.

I suppose there is a case to be made for  potential damage limitation, but that’s  your choice.

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Hi

It would appear so, it applies to all suppliers' variable tariffs. 

hi @Angelabikerbabe No it doesn’t some have derogations.

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@Gulfv 

I can’t confirm as I don’t work for PP

PP did indeed apply for derogation extension to Sept 2020, but I can find no evidence that it was further extended and thus must conclude that the cap does apply. However it’s somewhat of a moot point because it only offers protection in very limited circumstances (only if you defaulted onto the variable tariff) and it doesn’t in any event protect you from higher bills, you will still pay for what you use irrespective of the price cap, which is set at £1277 (for a typical user using average energy whatever that means) from October (I believe it’s currently £1138).

Also the cap was predicated on fixes being cheaper than the SVT which they aren’t for PP

If you look at the latest (Oct) variable tariff assuming you take the average of all it sails very close to the cap, some individual areas are very slightly more for a typical average user some slightly less. 

My guess is it does apply and does comply, but you’d have to get an answer from the mouth of the horse…

 

May I ask, why are you asking? Are you concerned that Ofgem may raise the cart that’s apparently driving the horse?

@woz I must look up how they define “average user”. I bet it is nothing like a real average user! Perhaps PP can provide some averages for us? It has the data.

Thanks for the good info @woz

 

I ask as with this period of rising prices, can PP simply keep passing on price increases with no cap rules to follow? It looks like for those who chose the 100% green variable rate from the start this is the case!

@Gulfv But then what else could PP do if they are so permitted? PP would collapse if price increases cannot be passed on. There is no profit in the cost of the fuel for they to absorb.

@G4RHL I fully understand that but clearly PP will not remain a viable supplier for some as obviously with other companies operating under the cap, prices will be lower if wholesale prices continue to rise.

 

I realise that the cap is reviewed regularly so I think we have an interesting (and expensive) period ahead!

@Gulfv I suspect those operating under the cap will not be with us for long. Those who sign up will find them selves paying a lot more when collapse occurs. A small company cannot operate under the cap at present unless it can buy at less than it charges customers or has a good financial backer with deep pockets. Remember most companies work on a profit margin on the price of fuel. PP don’t.

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@Gulfv But then what else could PP do if they are so permitted? PP would collapse if price increases cannot be passed on. There is no profit in the cost of the fuel for they to absorb.

Depends on PP’s deal with BP

BP is too big to collapse, so PP may be fine.

@Ohit 

“Depends on PP’s deal with BP

BP is too big to collapse, so PP may be fine.”

BP will look at it commercially. If it considers it will lose a lot, it will will the plug. However, they are more likely to take a longer term view, which is what they are doing with their green strategy, and see the current problem as a blip.

Don’t forget BP will be making money anyway from the price increases at production level.

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@Ohit

“Depends on PP’s deal with BP

BP is too big to collapse, so PP may be fine.”

BP will look at it commercially. If it considers it will lose a lot, it will will the plug.

Only at contract renewal. Or, at least, I’d expect the agreement to be a fixed period of time. PP’s fixed tariff’s would effectively be based on that agreement: i.e. PP know the supply price from BP and it’s up to BP to manage that on the wholesale side.

Hello

 

I’m just curious to know how this energy crisis is affecting Pure Planet? Is it likely that Pure Planet will go bust?

 

Thanks

 Charlie

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Who knows!

You need a crystal ball.  PP is different  for it makes no profit from what it pays for gas and electricity. It just passes on the wholesale price. Where it is a fixed contract then PP one assumes will have pre-bought the supply to meet the fix. Again therefore no affect.

However, where there could be a problem is with a variable tariff if a supplier has to sell at no more than the Ofgem cap but cannot buy it at the same or less. This is why some companies have slowed down taking on new variable tariff customers. It then depends on how strong the capital base is to survive the storm for existing variable customers if they find the purchase price is more than it can be sold to the customer for.

Ofgem ought in these circumstances step in for it is they that impose the cap.

Not a nice position for customers but this might shake out those who should not be in the market and only got into it as they saw it as a means for a quick buck.

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The CEO of Colorado Energy was on WATO on Radio 4 just, with some dire predictions about the possible effect of the wholesale gas price issue on the number of companies which may make it through the year. I don't know what the financial foundations of PP are like, so wouldn't like to comment apart from to say it would be a real shame if they didn't survive this turmoil. 

Apparently the Business Secretary is going to be making a statement in Parliament this afternoon after meetings with the great and good from the Energy industry. They're all crying out for a bailout of the "surviving" companies faced with picking up the customers of the failing ones.

Userlevel 4

I have just watched BBC news & what I take from it is the government is to loan money to the big energy companies to help them buy out the small energy companies thus leaving only the big energy companies in the market. It sounds ominous for Pure Planet especially as they don't profit from buying energy wholesale. The vultures are circling.

Userlevel 7
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Oh dear! 

Fingers crossed their hedging is sufficient @Twins. I’d hate to be dumped back into the current market rather than my nice fixed from earlier this year.