Tomato Energy is no longer trading. After several months spent trying to secure new financial backing, the company has decided to stop operating and has now moved into administration. Around 23,000 customers, made up of households and businesses, will be moved to a different supplier under Ofgem’s Supplier of Last Resort(SoLR).

Ofgem has put its customer protection measures into action, which means no one will lose access to gas or electricity during the switch from Tomato to Ofgem's appointed supplier. Customer accounts will be transferred automatically to the replacement supplier. Credit balance protection under Ofgem's Safety Net applies to domestic customers only. If your business is in credit with a failed supplier, that money is not protected, and you will need to register a claim with the administrators.

Whilst you wait, it is advisable that you…

While you wait, it's advisable that you:

  1. Take a picture of your meter readings for both gas and electricity as soon as you can. This protects you from billing disputes during the handover.
  2. Refrain from switching suppliers until Ofgem has appointed a new supplier under the SoLR process. Switching mid-process can complicate the transfer and delay any credit you're owed.
  3. Wait for the new supplier to contact you about your energy supply and next steps. Look out for an email or letter. Be wary of anyone who phones claiming to be from your 'new supplier' asking for payment details. Scammers target supplier failures, and genuine communications won't demand bank details over the phone.

What are you protected by under ofgem's SoLR?

Undisturbed Energy Supply:

Your energy supply will not be interrupted with the switch to a new supplier covered by the SoLR.

Protected Credit Balance:

For domestic customers, account credit is protected under Ofgem's rules and will typically be honoured by the new supplier. It's still worth checking once your new account is live.

For commercial customers, credit balances are not protected in the same way. Business customers become creditors of the failed company, and recovering money owed depends on the administration process. If your business was in credit with Tomato, take screenshots of your account balance now and register your claim with the administrators.

Energy Contract:

You'll be transferred automatically to the appointed supplier. This is handled by Ofgem and the administrators, so you don't need to do anything for the transfer itself. However, your old contract terms don't move with you. Once the switch has happened, you'll be placed on deemed energy prices or out-of-contract rates. These are usually among the most expensive rates on the market. That's the catch inside an otherwise smooth process: your supply is safe, but your price almost certainly isn't. Once the transfer completes, you're free to negotiate a proper contract with the new supplier or switch elsewhere without penalty, and we'd strongly advise comparing the market rather than staying on deemed rates a day longer than necessary.

What happened with Tomato Energy?

Tomato Energy had a number of financial problems that became too difficult to manage.

The company was already carrying around £3 million of debt. On top of that, it faced a £1.5 million redress order from Ofgem for service and compliance issues. That left very little money to keep operating, and attempts to secure new investment didn't succeed.

Energy supply in the UK is expensive and risky. Suppliers must hold enough capital to cope with volatile wholesale prices, support customer credit balances, and meet strict regulatory requirements. Tomato Energy didn't have enough capital to withstand these pressures, which is why it has now failed.

Supplier failures aren't new. Dozens of suppliers went bust during the 2021 to 2022 energy crisis, which is exactly why Ofgem tightened its financial resilience rules. Those rules have made failures rarer, but as this case shows, they haven't made them impossible.

Things to consider when you choosing the supplier.

When choosing your next supplier Smaller suppliers outside the Big Six can still be an excellent choice. Many offer attractive prices and strong customer service. When browsing your options, it's worth researching how long a supplier has been in business and whether it has a solid financial background, alongside price and service. Ofgem has introduced stronger rules to keep customers safe when a supplier fails. Even with those protections, it's wise to choose a reliable supplier from the start. A little knowledge of the energy market goes a long way in helping you select a company with a strong track record and pricing that suits your business.

How Can Purely Energy Help?

If you are a Tomato Energy customer and have any questions about what you should do next or dont want to pay additional out of contract charges. Don't hesitate to get in touch!

Contact us at 0161 521 3400 or Info@purelyenergy.co.uk. Alternatively, you can get a quick quote by filling in the box below.