Scottish Government confirms support for Our Power employees after ethical energy supplier folds

Communities Secretary Aileen Campbell tells parliament that the Scottish Government’s plans to develop a new public energy company are still on track

  • Our Power’s 70 Edinburgh-based employees will receive support from the Partnership Action for Continuing Employment (PACE) initiative
  • Both Ofgem and the Scottish Government have confirmed that no Our Power customers will have their services interrupted
  • Aileen Campbell says that the Scottish Government remains on track in its plans to create a new publicly funded, not-for-profit energy company

THE SCOTTISH GOVERNMENT has offered reassurances that employees of the ethical energy supplier Our Power will receive support following its recent collapse, and that no Our Power customers will be cut off.

Speaking at Topical Questions in the Scottish Parliament today, Communities Secretary Aileen Campbell described this week’s announcement that the not-for-profit Our Power has ceased trading as “disappointing and sad”, but echoed reassurances from industry regulator Ofgem that none of the company’s 38,000 customers will have their service interrupted.

Emphasising the Scottish Government’s priority that the interests of both Our Power staff and customers are protected, Campbell also confirmed that Our Power’s 70 Edinburgh-based employees will receive support from the multi-agency Partnership Action for Continuing Employment (PACE) initiative, which is supported by the Scottish Government, the Department of Work and Pensions, Citizens Advice, colleges and local authorities.

“We continue to develop proposals that will deliver the ambition of a public energy company and we’re on track to deliver that ambition by the end of this parliament.” Communities secretary Aileen Campbell

Campbell said that the Scottish Government will work with Our Power’s partners to find new employment opportunities for these “highly trained and experienced staff.”

Responding to a question from Liberal Democrat MSP Alex Cole-Hamilton, Campbell said that the Scottish Government was first made aware of Our Power’s collection difficulties on 21 December last year.

Reflecting on the lessons the Scottish Government might draw from Our Power’s experience in its ongoing push to create a publicly funded Scottish national energy company, Campbell continued: “We’ll give a commitment to take any learning that we can from the experience that we’ve gone through with Our Power.

“Of course, we continue to develop proposals that will deliver the ambition of a public energy company and we’re on track to deliver that ambition by the end of this parliament.

“This is something that was a new attempt to try and find a way to help people who are predominantly social tenants to have access to low-cost power, and it had done so for three-and-a-half years.

“I suppose it reiterates and underlines how disappointing it is that, ultimately, it hasn’t quite succeeded in this case.”

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The Our Power Community Benefit Society was founded in 2015 by 35 member organisations, including some of the biggest housing associations and local authorities in Scotland. Its creation was made possible by three commercial rate loans from the Scottish Government totalling £9.5 million.

In addition to this, the company raised £4.4 million in bonds in late 2017 from roughly 300 investors, who were offered them at a 6.5 per cent return. Our Power had hoped to turn a profit by 2020.

However, the UK financial website This Is Money reported on 25 January that it is not yet clear what will happen to the investors’ money, as an interest payment was due this month.

Our Power was widely touted as an alternative to the ‘Big Six’ energy companies, and hoped to save its members up to 10 per cent on household utility bills in comparison with standard commercial tariffs. Because of this, Our Power received significant backing from housing associations as part of ongoing efforts to combat fuel poverty in Scotland.

Our Power directors have this week blamed the volatility of the energy market for the company’s folding. It is expected that an administrator will be appointed on 31 January.

READ MORE: Scottish ethical energy supplier launches UK-wide effort to tackle fuel poverty

A statement from Our Power’s directors said: “It is with heartfelt regret that Our Power board of directors has taken the decision to close by taking the company into administration.

“Directors had no choice but to reach this decision as the requirement to bring working capital into the business outpaced our ability to improve revenue collection and raise funds.

“The leadership team and directors have done their utmost to try to find a solution but have been unable to and reluctantly took the decision to close the business.”

Ofgem director for future retail markets Philippa Pickford also commented: “Our message to energy customers with Our Power is there is no need to worry, as under our safety net we will make sure your energy supplies are secure and your credit balance is protected.

“We have seen a number of supplier failures over the last year and our safety net procedures are working as they should to protect customers.”

Picture courtesy of larzor

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