(Reuters) - Britain’s energy regulator said on Tuesday it would appoint a new gas and electricity supplier for around 130,000 domestic customers of Tonik Energy, days after the failed company was told to pay up its renewables fees or lose its supply licence.
Last week, Ofgem said seven small British energy suppliers, including Tonik, owe a total of 34 million pounds ($44.06 million) and urged them to pay up by Oct. 31.
Under Britain’s energy market rules, suppliers of energy must meet so-called renewables obligations and feed-in tariffs which are imposed on them by the government to help fund renewable power generation.
Several small energy companies have gone bust over the past two years as they struggled to pay the renewables fees and as their profits were affected by a price cap on the most commonly used tariffs and fluctuating wholesale prices.
"Under Ofgem's safety net, the energy supply of Tonik Energy's customers will continue and outstanding credit balances of domestic customers will be protected," the watchdog said in a statement. (bit.ly/34rQZqF)
Reporting by Yadarisa Shabong in Bengaluru; Editing by Shailesh Kuber
Our Standards: The Thomson Reuters Trust Principles.