Spark Energy future in doubt as sector plunges deeper into crisis
The future of Spark Energy has been thrown into doubt as its owners face an uphill battle to keep the firm afloat amid severe turmoil in the sector.
The Press Association understands that the company has enlisted KPMG to assess all options for the firm, including potential administration.
The professional services firm was initially brought in to oversee an accelerated sale or merger with another provider, but the collapse of rival Extra Energy this week and well-documented pressures in the industry have caused alarm among would-be investors, sources told PA.
If it were to collapse, Spark would become the seventh small energy supplier to go bust this year, leaving hundreds of thousands of customers in limbo.
Insiders insisted on Friday that all options remain on the table.
Spark has nearly 300,000 customers in the UK and employs 400 people at its head office in Selkirk in the Scottish Borders.
The revelations come days after Spark missed a deadline to make a £14.4 million renewable energy payment and barely 48 hours after rival Extra Energy went bust.
The energy market has been hit by stinging regulation, including a Government-enforced price cap on standard variable tariffs amid anger over rising bills.
Spark is backed by its chief executive, Chris Gauld, and finance chief Hamish Osborn, who led a management buyout of the firm in 2016.
Mr Gauld told Scottish media last week that the rising costs of wholesale energy and the price cap were hammering the sector.
Spark was founded in 2007, has a turnover of more than £200 million and also has around 15,000 broadband and telecoms customers.
Rival firms Extra Energy, Future Energy, National Gas and Power, Iresa Energy, Gen4U and Usio Energy have all gone bust in 2018.
If Spark was to join them, the energy supply of its customers should continue under Ofgem’s “safety net” procedure, and the regulator will choose a new supplier to transfer accounts.
Ofgem is understood to be monitoring Spark’s situation.
The regulator has recently tightened up rules for new energy suppliers entering the market.
New entrants will have to show they have adequate financial resources and can meet customer service obligations.
Ofgem said the tests should ensure new entrants are robust while encouraging competition and innovation in the market.
All parties declined to comment.