Economy Energy customers moved to Ovo days after ninth bankruptcy in a year

The 235,000 customers who were left in limbo earlier this week when supplier Economy Energy went bust have found a new home with Ovo Energy.

The new supplier will offer all customers a “competitive tariff” while promising to pay back those who were owed credit by Economy Energy, Ofgem said.

The regulator was forced to step in earlier this week when Economy Energy faltered after weeks of speculation it was on the brink of collapse.

The bankruptcy was the ninth to hit the industry in a year as small low-cost suppliers struggle to keep up with rising wholesale prices.

The defaults are also bad for the competition, as Ofgem’s safety net obliges other suppliers to cover certain debts when a company goes out of business.

“Ovo Energy has also agreed to absorb the costs of taking on these customers and outstanding credit balances, which means the extra costs will not fall on the industry or households,” said Philippa Pickford, Ofgem’s director for future retail markets.

Ovo has already established itself as a so-called supplier of last resort, willing to take on customers of companies which are unable to keep trading.

In November it started serving almost 300,000 customers who were left without an energy supplier when Spark Energy went bankrupt.

A spokesperson for the supplier said: “This is a good outcome for Economy Energy customers who have had an uncertain few weeks. We are very pleased to welcome these customers to OVO.

“If you are an Economy Energy customer, please wait for us to contact you once your new account has been set up.”