If your business energy supplier goes bust, your gas and electricity keep flowing. Ofgem moves you to a new supplier. The catch is that your fixed contract ends, you're put on a deemed contract, and any credit you've built up isn't guaranteed to come back.
This isn't just a 2021 problem. Rebel Energy stopped trading in April 2025 with around 6,000 non-domestic customers, and Tomato Energy failed later that year. As of November 2026, Ofgem is still processing the cost claims from those failures. So it's worth knowing what happens before it happens to you.
Will my business lose its gas or electricity?
No. Ofgem says your business energy supply won't be disrupted. It picks a replacement through a competitive process called the Supplier of Last Resort (SoLR) process. When Rebel Energy failed, Ofgem announced on 1 April 2025 that it had stopped trading, and its customers were being supplied by the replacement from Sunday 6 April 2025.
The energy reaching your meter doesn't depend on who sends the bill, so there's no gap in supply. Don't contact the network operator or try to arrange an emergency switch. The new supplier will contact you directly.
In rare cases, Ofgem and the government appoint an administrator to keep a failing supplier running instead. If that happens, your existing supplier will tell you what's going on, and Ofgem says you're free to switch away if you want to.
What happens to my fixed-price contract?
It ends. Your agreed rates don't carry over to the new supplier. Instead, Ofgem says the new supplier will put you on a special "deemed" contract.
This is where businesses often get caught out. The household price cap doesn't cover business energy, so deemed rates can be much higher than the fixed rates you'd agreed. Ofgem's guidance is clear on two points that help you:
- You're not locked into the deemed contract. You can change tariff or supplier at any time.
- You won't be charged exit fees for leaving.
That means sitting on deemed rates for months is a choice, not a requirement. Once your account is set up, ask the new supplier what fixed options it has and compare them with the rest of the market.
Is my credit balance protected?
Not fully, and this is the biggest difference between business and household customers. Household credit balances are protected by Ofgem's safety net. Business ones aren't.
Ofgem says it always tries to appoint a supplier that will cover all or some of the failed supplier's outstanding credit, but that isn't guaranteed. Its reasoning is that business customers can apply to the failed supplier's administrators to get their credit back. In practice, that can make you an unsecured creditor waiting for whatever the administrators recover. Ofgem warns that businesses could lose their credit balance and get no refund from the administrator.
So find out quickly whether the appointed supplier is honouring business credit. If it isn't, contact the administrators and make a claim with evidence of your balance.
What if I owe the old supplier money?
You still owe it. The debt doesn't disappear because the supplier has gone. When Rebel Energy failed, Ofgem told customers who owed money to wait to hear from the new supplier or the outgoing supplier's administrators. Rebel's administrators also confirmed that debit balances stayed with Rebel and weren't transferred.
Expect a final bill from the administrators for energy used up to the transfer date. The new supplier should only bill you from the date it took over. Check that the two bills don't overlap and that the switchover readings match.
Should I switch straight away?
No. Wait until the new supplier has set up your account. In the Rebel case, Ofgem encouraged customers not to switch until they were set up with the new supplier. Switching mid-handover can scramble your final readings and balances.
If you'd already agreed a switch to a different supplier before the failure, Ofgem's general guidance is that the switch should carry on to the supplier you chose.
Can I complain to the Energy Ombudsman about a failed supplier?
Usually not about the failed supplier itself. After Rebel Energy stopped trading, the Energy Ombudsman said it wasn't accepting new disputes about the company. It said customers unhappy with the replacement supplier's service should contact that supplier first. Normal complaint routes apply to the new supplier, and microbusinesses can escalate to the Ombudsman if those complaints aren't resolved.
One more thing to check: if you sell exported electricity (from rooftop solar, for example), don't assume that arrangement moves across. When Rebel failed, MoneySavingExpert reported that solar export tariffs weren't transferred automatically and customers had to find a new export provider.
Who pays for all this?
In the end, everyone does. Ofgem runs a process that lets the replacement supplier claim back extra costs of taking on the customers. This is called a Last Resort Supply Payment. Network operators pay these claims and then recover the money through charges to suppliers, so the cost ends up in everyone's bills. In September 2026, Ofgem published its draft decision on claims relating to Rebel Energy's customers.
How can I limit the damage before anything goes wrong?
You can't control whether a supplier fails. But you can limit how much you'd lose:
- Don't build up large credit. If you pay by fixed Direct Debit, compare it with your actual use every few months. Ask for excess credit back rather than leaving it on the account.
- Keep records. Save PDF copies of bills, statements and contracts. Ofgem notes that once a supplier stops trading, you may not be able to get into your online account.
- Take regular meter readings. Dated photos make it much easier to check the final bill and the new supplier's opening reading.
- Know your contract terms. Note your unit rates, standing charges and end date so you can compare any deemed rates properly.
What to do next
- Take dated meter readings (with photos) the day you hear your supplier has failed.
- Download or screenshot your latest bills and account balance while you still can.
- Wait for Ofgem to name the new supplier and for that supplier to contact you. Don't switch in the meantime.
- Check with your bank whether any Direct Debit to the old supplier is still being collected, and ask the new supplier how payments will work.
- Ask the new supplier whether it's honouring business credit balances. If not, make a claim to the administrators.
- Once your account is live, ask about fixed rates and compare the market. There are no exit fees, so you don't have to stay on deemed rates.
- Check the administrators' final bill against your readings and challenge anything that doesn't match.
This is general information, not financial advice.