F.A.Q.

What is the 'Supplier of last resort' (SoLR) and why am I affected by it? FAQ

  • 20 October 2021
  • 2 replies
  • 262 views
What is the 'Supplier of last resort' (SoLR) and why am I affected by it? FAQ
Userlevel 7
Badge +1

Updated on 17/05/22 by Jess_OVO

This is an OVO Community volunteer guide. See OVO’s official FAQs here. To learn more about what’s happening with the energy market check out this blog post.

 

Sometimes, all good things must come to an end, and as much as we’d all rather not see it happen, even energy suppliers unfortunately cease trading from time to time. And in recent times, this has been happening to a lot more suppliers than usual all at the same time. But what happens if a supplier goes down, and what happens to your energy supply? You never need to panic, as there’s always a solution to these issues.

 

Firstly, I want to reassure you that there are several measures in place to protect customers of failed suppliers and energy supplies will never be disconnected if a supplier goes bust. This forum guide focuses on one of them – the Supplier of Last Resort (SoLR) process managed by the regulator Ofgem. It can’t be used in all cases, but for those where it can be applied, it can effectively rescue all customers and transfer them to an alternative supplier – along with the credit balances of domestic customers which are also protected via the Ofgem Safety Net. These are very well tested processes and are overseen by Ofgem in order to ensure they are carried out correctly each time – and that the entire processes are completely fair to all parties involved.

 

I’d also like to mention that while this guide has been reviewed by OVO’s Community Moderators for moderation purposes, everything within has been written by a forum volunteer and OVO has had no editorial control over the content.

 

So… What exactly is SoLR about and what does it mean? Here’s everything you need to know.

 

What is SoLR?

 

The Ofgem Supplier of Last Resort process is designed to provide customers of a failed supplier with a sort of “emergency supplier” to allow energy supplies to continue being serviced. Ofgem finds and appoints an alternative supplier to take on affected customers. Because it’s only triggered in emergency situations that are considered a last resort option, this is where the name Supplier of Last Resort comes from. It is only used if an energy supplier ceases trading while serving active customers who couldn’t be migrated to an alternative supplier beforehand – SoLR is not used for cases where two (or more suppliers) decide to merge with each other or if one supplier buys another, since customers will generally be able to remain as they are.

 

When is SoLR used?

 

Only if an energy supplier ceases trading and has active customers on their books. There have been a few cases of suppliers closing after all customers have switched away or been transferred prior to closure though, and SoLR would be irrelevant for these cases and is not used for them.

 

But I don’t want to switch supplier! Can I opt-out?

 

Sorry, but I’m afraid this isn’t possible. By its very nature, SoLR is very much a last resort process and once activated, there’s no going back for that supplier. If your energy supplier has entered the SoLR process, that means they’ve already ceased trading and you will not be able to stay with them anymore. However, once you’ve been moved to the appointed supplier and allowed the new supplier time to sort out your account, get your credit balance transferred and everything else, you’re more than welcome to shop around and switch to a better tariff with the appointed supplier or switch away completely to an alternative. You will not be charged exit fees for doing so, because you wouldn’t have had a say in being switched. As such, it is not possible to opt-out of SoLR – especially because it’s also designed to be a protective mechanism to keep your energy supply safe.

 

What happens if my energy supplier triggers SoLR?

 

One of the first things that happens, is that the failed supplier notifies Ofgem of their intention to activate SoLR, makes an official announcement via all available channels and disables the ability to generate quotes or sign up. All open quotes are automatically revoked immediately at this point, so they should be considered null and void. Ofgem also confirms the use of SoLR via official announcements on the Ofgem website, which can also be viewed via their Master Publications Library at any time free of charge. The failed supplier will also initiate insolvency or administration processes where appropriate, but these are beyond the scope of this guide.

 

At this point, Ofgem then temporarily takes over management of affected customers and their energy supplies, while simultaneously starting to search for an alternative supplier to appoint in order to transfer them over. This is usually done by a reverse auction style process where all suppliers are asked to “bid” for the customers and Ofgem then selects who to appoint based on which offer is considered the most appropriate. It is designed to try to get the best possible deal for affected customers – especially given the short notice – and to help prevent any supplier being greedy. This can take a few days though, so it’s strongly recommended to sit tight and take a meter reading as soon as you’re made aware about your supplier going bust – this will be needed later. If possible, it’s recommended to attempt to submit these meter readings as soon as possible – you can usually still access the online account management during this time – and pay any outstanding bills or debts if you can. Don’t worry if you can’t though, as the Appointed Supplier will be able to assist later if you forget.

 

Once Ofgem has found a new supplier to take on your supply, that supplier will become the Appointed Supplier for the purposes of SoLR. The new supplier will contact you directly to let you know what’s happening and provide you with an update. You’ll be able to ask any questions if you need to, but please bear in mind that there’s often many other customers in the same position, so it’s possible that some of your questions may have already been answered on their website. That will usually be the easiest way to get answers quickly, but you can still contact them in an emergency if you need to.

 

From here, the transfer process is somewhat like what happens when you switch supplier normally, except with a few extra steps and a few differences. Some of the biggest differences are that unlike a regular switch, SoLR can automatically transfer things like your credit balance and Priority Services Register status over and can sometimes automatically migrate your Direct Debit as well. The exact details vary though, so it’s best to double check just to be safe. You’ll normally also be issued with a Final Bill from the failed supplier and any credit balance will be used to help pay off the Final Bill if possible – if there’s enough credit on the account to pay the entire Final Bill off, this will be taken automatically and the remainder will be transferred, so you won’t need to do anything yourself. The old account will then be closed, as the Appointed Supplier will create a new account for you. You’ll initially be placed on a special Deemed Tariff as well, which has no exit fees or minimum term, but may not be the best deal for you. Usually it’s the same prices as you were on with your previous supplier. You’re welcome to stay on this tariff for the time being, but the supplier might set a limit on how long they’ll offer it for. It’s very likely this supplier will send over this information to you, so you won’t need to contact them to ask. 

 

You’ll be able to ask to either switch to a better tariff or even switch away completely to another supplier of your choice once this process is fully completed – but it may take a few weeks to sort out before this can be performed, please be patient during this time. In the background, the SoLR process will continue even after your account is transferred, but most of the other steps in the process and other relevant processes beyond this point are more related to shutting down the failed supplier and handling their affairs, which aren’t visible to customers.

 

I had a credit balance with my supplier, what’s happened to it?

 

If you’re a domestic customer, your credit balance is completely safe because the Ofgem Safety Net will have rescued it. Some of the balance might be used to help pay off the Final Bill, but everything that’s left after that will be automatically transferred to the Appointed Supplier with your account and applied as an account credit to your bills with them. Any recent payments should also follow you as well, even if they hadn’t yet shown up in your account balance prior to transfer. Please note that it may take a while to get the credit balance transferred over, but it will be transferred as soon as possible.

 

I’m paying back a debt balance, what do I need to do?

 

Don’t worry, you won’t be in trouble. Either the Administrators of the failed supplier or the Appointed Supplier will be in touch to discuss this with you directly. Most likely, they’ll offer to let you clear the balance immediately, or continue with a repayment plan like the one you had before. You’re welcome to choose any of the options they provide which works best for you.

 

Is there a list of suppliers that have recently entered SoLR available?

 

Yes, an official list can be found on the Ofgem website on a dedicated page, as well as via the Ofgem Master Publications Library – both of which are maintained by the energy regulator Ofgem directly. I’m unable to provide a list in this guide as I wouldn’t be able to guarantee keeping it updated all the time. Ofgem also places highly visible banners at the top of their website for important announcements such as SoLR, these banners include quick links to read the full announcement without needing to search the archives.

 

Who will my new supplier be?

 

I wouldn’t be able to say right now. My TARDIS isn’t working for some reason, so I’m afraid I can’t time travel to the future and report back. The best places to check will be via the Ofgem website and via the website of the failed supplier. These will be kept updated once a new supplier has been appointed. It may take a few days for this to happen, so please check back in every so often to see if there’s any updates. What I do know however, is that a new supplier is usually appointed within a week or two of SoLR being activated. It’ll probably take me longer than that to fix my TARDIS anyway.

 

Can I switch supplier?

 

Yes, but you’ll need to wait for the Appointed Supplier to have set your new account up with their systems first – and ideally wait for any credit balance to be transferred over. If you try to switch away before then, it could take longer or be rejected, delayed, or stopped, since only one switch can be in-progress at a time. You’ll be able to switch freely once this has been completed. You won’t incur exit fees because SoLR places you on a Deemed Contract by default, which don’t lock you in.

 

What happens if I was already switching away before SoLR activated?

 

Don’t worry, your switch should continue as normal, and you won’t be switched to the Appointed Supplier unless you were already switching to them anyway. In these cases, SoLR won’t affect you unless the switch fails and bounces back – which would trigger SoLR and transfer you to the Appointed Supplier. In the event this happens, you’ll be welcome to try switching again once the Appointed Supplier has set up your account. Otherwise, the only thing that will differ from a regular switch, is that you might have a bit more fun paying off the Final Bill than usual, but either the failed supplier, their administrators or the Appointed Supplier will contact you with the details.

 

I was in the process of switching to the failed supplier, what can I do?

 

In these cases, you have a few options you could consider:

  1. If you’ve only just started the process and haven’t yet gone on-supply, you might be able to cancel the switch completely – please contact your existing supplier and let them know. They’ll attempt to stop the process and if they’re able to, you’ll remain with them on your existing tariff. If you act fast, the request might get through in time
  2. If you’ve gone on-supply but are still within the cooling off period, you might be able to cancel the contract and switch back – but it’s not guaranteed.
  3. Stay put and allow the switch to complete anyway – you’ll be automatically bounced to the Appointed Supplier, but you can switch away later if you wish.
  4. If the Appointed Supplier is the supplier you wanted to switch to anyway, simply allow the switch to continue and then ask to be put on your preferred tariff once they contact you. This would be easiest option if you were thinking of switching to that supplier, since it’ll also bring across your account balance and account details (but you’ll get a new account number).
  5. Likewise, if the Appointed Supplier happens to be your existing supplier and you don’t mind switching back, you could decide to allow the SoLR process to switch you back and then just set the tariff up again once you’re back with them.

The options available to you will vary based on where you were in the switching process when SoLR was activated – as well as factors such as who the Appointed Supplier is. If you’re unsure, I recommend contacting your existing supplier for help.

 

Will my prices change?

 

Most likely, yes. The deemed tariffs that are selected via SoLR will almost always be based on a Variable Rate Tariff that’s often close to the regular Standard Variable tariff offered by the Appointed Supplier. There’s also no option to lock in these rates, so you’ll need to choose a different tariff or switch supplier if you wish to get a Fixed Rate Tariff. It’s best to shop around before deciding though.

 

I had a fixed rate with my original supplier, can I bring it over?

 

Unfortunately, this isn’t possible I’m afraid. The rates that you agreed with your original supplier would have been based on what they were able to get on the energy market when you first signed up – it’s almost certain that market conditions would have changed since. Because the Appointed Supplier wouldn’t have been a party to the original agreement, they won’t be able to honour it, especially at such short notice.

 

I had complaints open with my supplier, what can I do?

 

This can vary on a case-by-case basis. Ofgem SoLR does not currently require an Appointed Supplier to investigate complaints regarding a failed supplier, but some may be willing to investigate them. It’s worth noting however, that the options to resolve the complaint may be limited. I’d recommend checking the website of the Appointed Supplier to see what your options are.

 

Please bear in mind that as the Appointed Supplier will not have been involved with the original complaints process of the failed supplier, they are entitled to close all such cases by default if they choose and opt-out of investigating them. If this happens, your best bet will be to contact the administrators of the failed supplier to see if they’re willing to take on the complaint. It’s best to give it some time first though, as there will be lots of people making contact early on. 

 

What about my complaints that are currently with the Ombudsman?

 

I’m sorry, but unfortunately, it’s almost certain that the Energy Ombudsman will have to close your case, since there’ll no longer be a supplier in a position to answer it – which effectively triggers a stalemate that can’t be broken. At the very minimum, the Energy Ombudsman will probably have to put your case “On Ice” for a while so they can decide what to do next. They’ll be in touch to let you know the outcome so please be patient during this time. If you still wish to pursue the complaint, your best option would be to contact the administrators of the failed supplier. Again it’s best to give it some time first though, as there will be lots of people making contact early on. In addition, any future complaints raised with the Energy Ombudsman regarding a supplier that has ceased trading will be rejected and closed automatically by default, as there’d be no possible solutions and no supplier able to answer the case.

 

While this may be frustrating and not a desirable outcome, it wouldn’t be practical for the ombudsman to keep these cases open if there’s no possible chance of a resolution. As such, the cases are generally closed with a neutral outcome that favours neither the supplier nor the customer, since there’s nothing further that can be done. This does not mean that the Ombudsman is rejecting your case as such, just that they’re unable to proceed further and would never be able to resolve it in any other way. You can also refer to the SoLR Procedures on the Ombudsman Services website, at https://www.ombudsman-services.org/solr-standard-procedure .

 

I still need help with something else that’s not answered here, what can I do?

 

Feel free to post here on the forum and we’ll try to help if we can. I should mention that as forum volunteers, we can’t access accounts or make any changes, but we can provide general advice that might help to solve your problem. We’ll let you know if that’s the case.

 

Please bear in mind that we’re also unable to get access to information any faster than anyone else and we’re only able to access publicly available resources.

 

Hope this helps!


2 replies

Userlevel 7

Thanks for posting this guide, @Blastoise186 :)

 

OVO have also made some FAQs here to answer any questions from OVO’s side. To learn more about what’s happening with the energy market overall, check out our useful blog post.

 

Anything missed? Leave a comment below...

Userlevel 7

A really great guide to the SOLR process from our community volunteer, @Blastoise186.

 

Our content team have also been busy writing this guide to the Ofgem price cap which might help explain why we’re seeing so many suppliers going through the SOLR process at the moment:

 

Why has the energy price cap increased in 2021?

 

The current energy price cap is higher because wholesale energy costs have risen rapidly in 2021. This is due to a few different factors, some of which you can read about in this government explainer. We've outlined the main ones below: 

  • Global economies are ramping up again after Covid-19, which is driving demand for gas
  • A slowdown in wind energy has caused the UK to fall back on electricity generated by power plants, some of which burn gas
  • The UK has relatively low levels of gas storage capacity, and these were also depleted during a cold spring earlier this year

Reply