THE finance chief of a Birchwood based energy company has written to Warrington Borough Council expressing concerns about the non-payment of a £12.5m liability to Ofgem by part council-owned Together Energy.
In a letter to Warrington Borough Council leader Cllr Russ Bowden, Mike Smith, Chief Financial Officer at Utilita Energy Limited based on Leacroft Road, Birchwood, has accused the council of condoning the “illegality” of a company it has a 50 percent stake in, saying it will leave his company out of pocket.
Writing as a retail energy supplier and a business invested in and committed to Warrington he said: “Non-payment means that Utilita and other well managed Energy Supply Companies will have to pick up the pieces and pay the mutualised costs of TE’s non-payment.
“Utilita consider that the Council is acting in such a way that Utilita will be out of pocket and thus we reserve the right to take whatever action is needed to recover our losses.”
It is understood that non-payment of Renewables Obligations results in other energy suppliers having to pick up the bill.
Should Together Energy fail to pay their liability they could have their licence revoked meaning they would be left unable to continue trading.
Pressure on the energy industry is continuing to mount, with six companies ceasing trading this week, following on from numerous others in recent months.
A spokesperson for Warrington Borough Council said: “Together Energy is currently facing the same challenges as the rest of the energy sector given the ongoing, challenging market conditions. It is not the council’s obligation to pay this fee – it is the obligation of Together Energy – but we remain reassured that Together Energy continues to fully engage with Ofgem on this matter.
“We also continue to monitor the situation, taking external advice throughout.”
* Utilita Energy is an electricity and gas supplier operating in the United Kingdom. Utilita began trading in 2003 – specialising in Smart Pay As You Go Energy. It is one of the UK’s largest energy suppliers by market share.
The full letter
Dear Councillor Bowden
Together Energy
I write representing a retail energy supplier and a business invested in and committed to Warrington.
Our warehouse and offices are sited in your own ward, Birchwood.
I am concerned to read on the Warrington Worldwide website (https://www.warringtonworldwide.co.uk/2021/11/01/council-satisfied-non-payment-of-12-5m-renewables-obligations-is-inbest-interest-of-together-energy/) that the Council condones illegality, and happily sits by while a business it controls fails to meet its financial commitments.
The £12.5m Renewables Obligation (RO) that Together Energy (TE) owes to Ofgem is a known liability, that is now past due. The customers of TE made payments to TE over the course of the year to 31 March 2021 so that TE had the resources to pay its RO by 31 October at the latest. What has
happened to that money?
It is a condition of TE’s Electricity Supply Licence that payments for RO are made by 31 August (or 31 October with interest). Irrespective of the difficulties that the energy sector is facing this winter and there are many, this RO is a past liability that a well-managed company should have paid by the due date. Non-payment means that Utilita and other well managed Energy Supply Companies will have to pick up the pieces and pay the mutualised costs of TE’s non-payment.
Utilita consider that the Council is acting in such a way that Utilita will be out of pocket and thus we reserve the right to take whatever action is needed to recover our losses.
Yours sincerely,
M D E Smith BA FCA
Chief Financial Officer
3 Comments
Disgrace that WBC should be wasting ratepayers money on these ‘investments’ which may result in huge losses for them.
The real disgrace is that Cllr. Bowden, presumably acting on behalf of the Cabinet although I’m never sure, condoning if not encouraging TE to not pay a debt. Some would say that is being complicit in an illegal act.
As a customer of TE I can say I have never dealt with such an unprofessional company that has such a lack of customer care. I feelequally sorry for all their customers and the residents of Warrington all of whom will undoubtedly suffer at the hands of this totally incompetent supplier.