Administrators from A&M appointed to People's Energy

30 September 2021 3 min. read

Amid the mounting energy crisis of the UK, Alvarez & Marsal has been appointed as administrator to the People’s Energy Company. The news comes days after the firm was also announced as administrator to PFP Energy.

The People’s Energy Company was built on the back of a major crowdfunding campaign by co-founders David Pike and Karin Sode in 2017. Having successfully raised £487,815 from 2,059 supporters in 199 days, the firm received an Ofgem license, and was eventually launched on the promise of returning 75% of profits back to customers.

While People’s Energy offered 100% renewable electricity, and accrued 360,000 customers in the following years, it has now become one of a growing number of UK firms to collapse, amid skyrocketing power prices. Based in Shawfair, Scotland, it employed around 460 people across its group – many of whom now face uncertain futures.

Administrators from A&M appointed to People's Energy

As the company falls into administration, Jonny Marston, Rob Croxen and Paul Berkovi of professional services firm Alvarez & Marsal (A&M) Europe have been appointed to oversee the process. A release from the firm coinciding with the news stated that “regrettably, there are likely to be some redundancies,” even as a portion of the staff is retained in the short term to assist with the transfer of customers, raising of final bills, the credit control process and help the joint administrators with their statutory duties.

A&M’s Berkovi stated, “Unfortunately People’s Energy, a company founded on strong ethical principles, has fallen victim to the very challenging conditions being experienced by UK energy retailers. This has led to the directors placing the company into administration. In the coming days we will be focusing on working with affected employees and discussing transitional arrangements with the appointed supplier for People’s Energy customers.”

The company’s 360,000 customers have been transferred to British Gas, as part of the Ofgem’s Supplier of Last Resort (SoLR) regulated process. Meanwhile, the administrators will seek buyers for the energy company’s assets, without interrupting the supply of consumers.

Energy crisis

Recent years had seen it suggested that the energy sector was “on the verge of a technological revolution” with smaller, digitally savvy operators soon to eat into the profits of mega firms, “spelling profound change for the industry.” In this context, some experts anticipated greater choice for consumers, enabling the lowering of spiralling energy prices.

Three years later, that particular assertion is looking like an ever more distant dream, with the news that a spattering of smaller energy firms have collapsed, or are on the brink of doing so. After the price of buying wholesale gas shot up, more than 1.5 million people across Britain have now been affected by energy suppliers going bust. Amid the crisis, six suppliers already folded, and there are growing fears more could shortly follow suit as the nation approaches the cold winter months.

Alongside People’s Energy, the firms to have already folded include HUB Energy, MoneyPlus Energy, Utility Point, Green, Avro Energy, and PFP Energy – where A&M is also acting as administrator. UK energy companies Bulb and Igloo are also reportedly on the brink, according to the British press, with the former seeking a bailout and the latter in talks with a professional services firm on a potential insolvency process.

Meanwhile, the “winter gas season”, when heating demand is usually higher, starts in October, and there are predictions of a colder than average winter. While Government ministers have insisted the UK has enough gas to avoid the lights going out, or a 1970s-style three-day working week, analysts warned low temperatures could exacerbate the crisis – pushing more firms to collapse, and with them the capacity of the UK energy network to meet demand.