This week, Ofgem announced that Tomato Energy has ceased trading, affecting around 15,000 domestic customers and 8,000 non-domestic customers. For charities and not-for-profit organisations caught up in this situation, I wanted to provide some immediate practical guidance and share some thoughts on what this means for supplier selection going forward.

If you’re a Tomato Energy customer

First, don’t panic. Your energy supply will continue without interruption. Ofgem’s Supplier of Last Resort (SoLR) safety net ensures customers face as little disruption as possible when suppliers fail.

Here’s what you need to do now:

• Take a meter reading today and keep it safe for when your new supplier contacts you
• Continue paying your bills as normal – amounts owed still need paying
• Wait for Ofgem to appoint a new supplier – they’ll be in touch within the coming weeks
• Don’t switch suppliers yet – wait until the transfer is complete, then you’re free to move

If you’re a domestic customer, your credit balances are protected under Ofgem’s rules. The energy price cap will also protect you when being switched to your new supplier. Once your new supplier contacts you, you can ask to be put on their cheapest deal or look for an alternative supplier without facing exit fees.

The human cost of supplier failure

Before we discuss what this means for supplier selection, let’s acknowledge the reality: when energy companies fail, real people are affected. Staff lose their jobs. Suppliers lose money. There’s genuine misery behind the regulatory announcements, and we shouldn’t forget that even when drawing lessons from these events.

Why suppliers fail

Tomato Energy’s closure didn’t happen overnight. In April, Ofgem published a provisional order and launched an investigation into whether Tomato was maintaining sufficient capital and liquidity. The company missed compliance deadlines in May and August. In October, Ofgem proposed a £1.5 million financial penalty for failure to address capital and liquidity deficiencies. By November, the company had ceased trading.

This pattern tells us something important: the warning signs were there for months. While Ofgem has strengthened rules since the energy crisis to make suppliers more resilient, some companies will still fail occasionally. The question for charities is how to avoid being caught in these situations in the first place.

The lowest price trap

Here’s the uncomfortable truth: when charities select energy suppliers purely on price, they’re gambling with their organisation’s stability. The lowest price often comes from suppliers operating on the thinnest margins with the least financial resilience. When market conditions change or regulatory requirements tighten, these suppliers are the first to struggle.

We’ve seen this pattern repeatedly. Suppliers win contracts on price, then fail to deliver on service, stability, or compliance. The “savings” evaporate when you’re dealing with the disruption of supplier failure, the administrative burden of switching under emergency conditions, or the uncertainty of not knowing whether your next bill will be accurate.

What should charities consider instead?

Price matters, obviously. Every pound counts for charitable organisations. But price is only one consideration when choosing an energy supplier, and it shouldn’t be the deciding factor. Here’s what else matters:

• Financial resilience: Does the supplier have sufficient capital and liquidity to weather market shocks? Are they meeting Ofgem’s requirements not just today, but consistently over time? Have they been subject to provisional orders or compliance investigations?
• Service quality: What are their response times? Can you actually speak to someone when problems arise? Do they resolve billing issues promptly, or do errors drag on for months?
• Track record: How long have they been operating? Have they successfully navigated previous market challenges? What’s their complaint record with Ofgem?
• Sector understanding: Do they understand the specific challenges facing charities and not-for-profits? Are their contracts structured appropriately for organisations managing donor money?
• Transparency: Are their fees and charges clear upfront? Do they explain how they make money? Are there hidden costs that appear later?

Why this matters for charities specifically

Charities managing tight budgets and donor funds need to avoid hidden costs and unclear deals more than most organisations. When suppliers fail, it’s more than an inconvenience. It becomes an administrative burden that diverts time and resources away from doing what you do. Staff who should be focused on delivering services are instead managing emergency supplier switches and chasing billing issues.

The disruption isn’t worth the marginal savings from choosing the cheapest option. Stability, reliability and proper service delivery create better value over time than the lowest price.

Moving forward

Since the energy crisis, the market has become more resilient, and strengthened rules around capital requirements and ringfencing customer credit balances mean suppliers must be better prepared for shocks. But as Tomato Energy’s failure shows, these protections aren’t foolproof. Some companies will still fail, and charities need to protect themselves through informed supplier selection.

If you’re currently reviewing your energy arrangements or affected by Tomato Energy’s closure, take time to assess suppliers on more than just price. Ask about their financial stability, their service standards, their understanding of the charity sector, and their track record of regulatory compliance.

At Utility Aid, we’ve spent over 20 years helping charities navigate these decisions. We don’t just find you the cheapest rates. We assess supplier stability, negotiate service guarantees, and ensure charities work with suppliers who understand their unique needs. Through our National Charity Tender, we use collective buying power to secure competitive pricing alongside enhanced service standards that individual organisations couldn’t achieve alone.

For Tomato Energy customers needing guidance on their next steps, or any charity reviewing their supplier arrangements, we’re here to provide straightforward advice without pressure. Sometimes the best thing we can do is help organisations understand their options and make informed decisions that serve their long-term interests.

The lowest price means nothing if your supplier fails six months into your contract. True value comes from competitive pricing combined with financial stability, reliable service, and proper understanding of what charities actually need from their energy partners.

Giles Hankinson, Chief Executive Officer Utility Aid

For immediate support, please contact partnerships@utility-aid.co.uk.