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UK's big energy suppliers eye bankrupt provider's 160,000 customers

Mon, 28th Nov 2016 16:55

* Lots of interest in supplier tender - Ofgem

* GB Energy no longer trading after price rise, inability tohedge

* Those without trading partner, production are at risk

By Karolin Schaps and Susanna Twidale

LONDON, Nov 28 (Reuters) - Britain's biggest energysuppliers have submitted bids to take over 160,000 customersleft behind by bankrupt energy provider GB Energy, whichcollapsed on Saturday after being caught out by rising marketprices.

All of Britain's Big Six energy suppliers, EDF Energy, Innogy's Npower, E.ON, ScottishPower, SSE and Centrica's British Gas,have submitted bids in a tender run by regulator Ofgem to supplyGB Energy's customers, sources familiar with the matter said.

Npower confirmed it had submitted a bid. Centrica, EDFEnergy, SSE, E.ON and Scottish Power declined to comment.

"We've had lots of interest (in the tender)," said aspokeswoman for Ofgem, which has up to 14 days to choose a newsupplier for GB Energy's customers.

GB Energy said on Saturday that it was no longer tradingafter a quick rise in energy prices and its inability to forwardbuy energy meant its business had become untenable.

In recent months, energy suppliers had grown increasinglyconcerned about the possibility of a small supplier going underas wholesale power and gas prices have spiked ahead of thepeak-demand period in winter.

"Those which don't have the backing of a large tradingpartner or their own generation sites could be vulnerable," saidJuliet Davenport, chief executive of green energy supplier GoodEnergy, which has its own power production.

Good Energy has not submitted a bid to take over GB Energycustomers, a spokesman said.

Many smaller energy providers, such as First Utility or OvoEnergy, have hired established trading businesses, in these twocases Shell, to run energy procurement and hedging.

Ofgem updated its rules last month, allowing any supplierstepping in to take over customers of a bankrupt supplier torecoup the cost of reimbursing outstanding customer credits byincreasing energy bills.

Analysts at Moody's said they estimate GB Energy's customerdeposits to be less than 10 million pounds ($12.4 million).($1 = 0.8051 pounds) (Editing by Susan Fenton)

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