Electricity retailer fined by Ofgem for failing to reduce its £3m debts
Energy regulator Ofgem today said today it plans to slap embattled electricity retailer Tomato Energy, which has a base in Wolverhampton, with a £1.5m fine for failing to pay down its £3m debts
Today’s announcement comes after Ofgem issued a notice to TE in April banning it from taking on new customers and warning it to comply with industry liquidity thresholds amid increasing concerns from debtors.
The firm, headquartered in Basingstoke, received subsequent orders over the summer from Ofgem instructing it to knock its finances into shape or face the consequences.
Today Ofgem said on its website: “Ofgem is publishing a proposal to impose a penalty on Tomato Energy because of its non-compliance with the issues linked to the provisional order published in April.
“We are proposing a financial penalty requiring it to pay £1,500,000. This is for breaching the standard licence condition that requires it to obtain and maintain liquidity at a level that enables it to pay its ongoing financial liabilities.”
In the text of the latest order to TE, Ofgem said “proposing to impose a financial penalty is appropriate to deter future misconduct by Tomato Energy and by other industry participants.”
The regulator said: “We have taken into account that Tomato Energy has been in financial distress and therefore at heightened risk of exiting the supply market due to insolvency for a prolonged period.
It added: “We recognise that the senior management of Tomato Energy have been taking steps to engage with potential investors and other third parties to address its cashflow challenges and bring the licensee into compliance with its regulatory obligations.
“However, these efforts have not yet resulted in any tangible or sustained reduction in the level of Tomato Energy’s unpaid debts.”
Last month TE made its entire communications team redundant.
TE has been contacted by WM News for comment.
Ofgem’s full order is here: https://www.ofgem.gov.uk/publications/tomato-energy-limited-failure-maintain-liquidity?fbclid=IwdGRjcANZxJ5jbGNrA1m0OGV4dG4DYWVtAjEwAGJyaWQRMTFRWFNFSmlnZjVHdUxUcFkBHtJJfA3TjoxcymM0g3iGZbwwRkdVB2qtlSylTnPCoW4QJ55nuulyYdmwEx5l_aem_MpsSnOu-ETHTpJZOOaeb2A
