Another energy company collapses owing $10m as electricity crisis worsens

Yet another power company has collapsed amid Australia’s ongoing energy crisis, leaving nearly customers across three different states in limbo.

Yet another power company has collapsed amid Australia’s ongoing energy crisis, leaving nearly 300 customers across three different states in limbo.

Last week, on August 25, the Australian Energy Regulator (AER) had no choice but to initiate “the Retailer of Last Resort process” against Social Energy Australia Pty Ltd, a company once spruiked by the late cricket legend Shane Warne.

It means the retailer is unable to keep providing electricity to customers and had to disconnect them from the grid.

Social Energy Australia was unable to keep supplying electricity so as it had gone into voluntary administration a week prior.

Although the company’s demise only impacted around 300 customers across NSW, Queensland and South Australia, it owes $10 million to 90 creditors.

A further 33 staff members lost their jobs.

Philip Campbell-Wilson and Said Jahani of Grant Thornton were appointed as joint administrators.

Customers were automatically passed on to retailers such as Origin Energy and Energy Australia.

I'm proud to be launching Social Energy in Australia, helping Aussies reduce their energy bills by as much as 100%, with solar panels, battery storage and our leading 40 cent feed-in tariff" Exciting times with @MichaelVaughan ! Please check us out https://t.co/AbLG1EKiYwpic.twitter.com/8klO1PEZJw

— Shane Warne (@ShaneWarne) November 24, 2020

Even though their energy provider has collapsed, the regulator assured customers that they do not have “to take any immediate action”.

The AER also told customers they “are under no obligation to remain with their new retailer once they are transferred”.

A special hotline has also been set up for customers on 02 6243 3065.

Social Energy Australia was a subsidiary of a UK company that also went into administration. It was registered in Australia in 2019 and officially launched in 2020, with the backing of sports star Shane Warne.

The company was based on the idea of grid sharing, with customers using solar panels and batteries that connected them and shared energy.

In a statement to news.com.au, the administration firm Grant Thornton revealed that the company was struggling to stay solvent after its parent company collapsed.

“As Social Energy Australia was in an early stage of its lifecycle, once the funding line from the UK parent company was withdrawn, it could not operate solvently in the market, particularly with the current volatility of wholesale pricing,” a spokesperson said.

“All customers have been notified of Grant Thornton’s appointment as Administrator and we have worked closely with the regulators AER and the AEMO to transfer their energy needs to an alternative provider.”

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Australia is in the throes of a power crisis. Picture: Paul Ellis/AFP.

The AER said it came up with the Retailer of Last Resort scheme “to ensure that in the event of retailer failure, arrangements are in place to ensure that customers continue to receive electricity and/or gas supply.

Earlier this year, the AER used its last resort scheme on Mojo Power East and Enova Energy.

Another electricity provider, Elysian Energy, collapsed just days apart from Social Energy Australia.

HelpPay Co-Founder Rowan Wilde, who left the electricity industry to start a social enterprise, issued a grim warning about the latest energy retailer going under.

“We've now seen seven electricity companies in Australia collapse already in 2022,” he said. “Between 2016 and 2019, just four electricity companies went down.

“This week thousands of Australian households are scrambling to find a new energy company during a time of ongoing inflated energy prices that sees no sign of abating.

“Unfortunately the good energy deals available just a few months ago no longer exist, and these impacted customers will almost certainly face higher prices than they were on.”

Smaller energy retailers are falling like dominoes as rising prices mean it is no longer profitable for them to keep supplying power to customers.

News.com.au previously reported on Victorian energy retailer Electricityinabox sending a “blunt” email to customers urging them to jump ship as they were about to hike prices by 95 per cent.

Morgan Duncan, the CEO of Electricityinabox, told customers that “only the lazy or crazy would stay” with his company, as its rates would go up 95 per cent on July 1, almost doubling his customers’ bills.

“We recommend you switch to a better deal today as switching is not always immediate. In some parts of Australia it can take well over a month. Act now to avoid the price hikes.”

Electricityinabox was the seventh provider to tell customers to go elsewhere, after similar statements from firms including ReAmped, LPE, Discover, Elysian and Future X.

Elysian collapsed within a few months after issuing that statement.