Warrington Borough Council-backed Together Energy ceases trading

Together Energy confirmed the news in a message on its website.

It said: “We are saddened to inform you that Together Energy is ceasing to trade.

“We regret to inform you that the company will cease trading with immediate effect. We want to thank you sincerely for your custom over the past five years.

“Despite press reports, we did buy enough gas and electricity for your needs, but the sustained increase in wholesale prices and the securities required to continue to forward purchase the energy, have meant that it is untenable for us to continue.”

The firm is 50 per cent-owned by Labour-run Warrington Borough Council but has been facing major issues.

It was reported earlier this month that it was likely to run out of money later in January without an emergency capital injection.

Together Energy - which has around 176,000 customers - employs 15 members of staff in Warrington and hundreds of others in Scotland.

The council owns a 50 per cent stake in Together Energy after initially investing £18million in September 2019.

It has also given a loan of £20 million.

Town Hall

In the message on its website, the company also said Ofgem ‘will choose the best supplier for you’, with this process called Supplier of Last Resort.

It added: “Ofgem will protect your supply and you will not be cut off at any time. Any credit balance you have will also be transferred to your new supplier.

“We will update this page with more information once your new supplier has been appointed by Ofgem and we expect this to be confirmed by Monday 24th January.

READ MORE > Timeline to the end of Together Energy

“Ofgem’s advice is not to switch suppliers but to wait until they appoint a new supplier for you. This will help make sure your account transfer, including honouring any credit balance, is as hassle free as possible for you.”

The town’s Conservatives, the Opposition group on the council, have been expressing concerns over the council’s investment into the firm.

Earlier this month, the Tories also highlighted that the council last confirmed a 'potential exposure' of more than £52 million to the energy supplier, adding that news reports are now suggesting that 'attempts to secure new funding and the prospect of a solvent deal are now remote'.

Liberal Democrat finance spokesperson, Cllr Ian Marks, has commented on the matter.

Cllr Ian Marks

He said: “Liberal Democrats supported the attempt by the council to work with Together Energy to try and find a way of preventing the company from going into administration by attracting new funding. This was a forlorn hope in the current energy market but had to be tried. 

“On many occasions we have stated that we support the council in most of their commercial investments to generate income to meet the shortfall caused by central government cuts.

“Regeneration in the town, solar farms and housing are risks worth taking.  However I say again, that right from the start we have opposed the investments in Together Energy and Redwood Bank.  They were too risky and councils have no expertise in such businesses. 

“Sadly the collapse of Together Energy and the downgrade in the valuation of the Bank shows we were right.  The investment in the HUT Group is also questionable.  It is worth reminding the Labour Council that the men behind the Bank and HUT are both major donors to the Conservative Party.

"We question why the Government has not made it clearer about what kind of investments are legal and justified. We live in a strange world where a Council is allowed to borrow money cheaply and then invest it in commercial ventures in totally different businesses to make a profit. 

"The Conservatives complain about the council’s high level of debt but we don’t hear them complaining about the record levels of debt incurred by their government. Local Conservatives have never told the public how they would protect vital services if there was no investment income.

"We must hope that ongoing discussions over the next few weeks between the regulator OFGEM, Together Energy and the council will minimise the financial impact on council taxpayers.”

Tory Warrington South MP Andy Carter has also issued a statement.

MP Andy Carter

He said: “Having highlighted this risky investment many times in Parliament over the last two years it was only a matter of time before the inevitable happened, I’m sorry to see that Together Energy has gone into administration and I recognise this will be a concerning time for those people whose jobs are now immediately at risk. 

"Labour councillors simply should not have made this investment decision, the level of scrutiny needed, expertise in managing tricky energy markets and experience in commercial governance are simply not present within the council. 

"I understand councillors were advised not to make this investment but decided to press on in any case. Labour’s line will be to blame everyone else but it is clear this decision was taken by Labour councillors and they must be held to account for the losses which will inevitably follow.

"They’ve known for weeks that this investment is at risk yet they’ve continued to support further loans to private companies. I call on them to halt this reckless policy and focus on delivering services to local people.

"I’ve already met with the energy minister to try and minimise losses for people in Warrington, I understand the process of administration will take some time and I will be looking to recover as much of the £52 million public money invested in this business."

READ MORE > Together Energy ceases trading, reaction as it happened

Warrington Borough Council has now issued a statement on the issue.

It says: "We’re very disappointed that Together Energy will be ceasing to trade due to the current energy crisis, which has already resulted in the closure of several energy companies.

"Our vision was to be part of a company that tackles the climate emergency by delivering 100 per cent green energy to customers, contributes to reducing fuel poverty and provides local jobs in Warrington – particularly for those out of work or without formal qualifications - but the current market conditions are sadly not sustainable.

"We know that Together Energy’s operating model was resilient and our approach to hedging extremely robust, but the enormous and sustained wholesale price rises mean that it is now one of many companies that has had to leave the market.

"We know this will be a difficult time for Together Energy customers and staff. We also know that Together Energy’s closure will have an impact on our residents.

"While it is our absolute priority to minimise any and all exposures we have as a council, we must first, as a priority, ensure that the independent administration process completes in a timely manner, and that Together Energy’s customers are seamlessly transferred to another provider."

The Conservative group, the Opposition group on the council, have commented on the matter.

Cllr Ken Critchley, Conservative, said: “The failure of Together Energy is a failure of the investment processes of this Labour-led council.

"The sooner this high-risk, high borrowing, strategy of the council is brought under control and put into reverse the better for everyone living in Warrington.

“Within the space of seven days the two of the most high-profile external investments Together Energy and Redwood Bank have both had financial news that undermines the credibility of the decisions taken by the council to invest in these companies.”

Cllr Mark Jervis, Conservative, said: “Today’s announcement is a clear demonstration of Labour’s total lack of expertise, due diligence and oversight from the outset of these high-risk investments and it is the council taxpayers of Warrington who will bear the financial consequences of this flawed decision making by Labour councillors”.

Cllr Kath Buckley, Conservative group leader, added: “We have called for an extraordinary meeting of the full council. This meeting is now to be held on the 9th of February.

“At this meeting we will be holding this Labour-led council to account for its appalling decision to invest in and, subsequently, its failure to manage this investment.

“The tragedy is that this is public money that this council have been playing with and the implications for these failures are felt most keenly by the most vulnerable people living in Warrington.”

Neil Lawrence, director of retail at Ofgem, says Ofgem’s 'number one priority' is to protect customers.

He added: "We know this is a worrying time for many people and news of a supplier going out of business can be unsettling.  

“I want to reassure affected customers that they do not need to worry, under our safety net we’ll make sure your energy supplies continue. 

"Ofgem will choose a new supplier for you and while we are doing this our advice is to wait until we appoint a new supplier and do not switch in the meantime. 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 tariff. 

"Any customer concerned about paying their energy bill should contact their supplier to access the range of support that is available."