Together Energy: Council between rock and a hard place

Warrington Borough Council is caught between a rock and a hard place over what to do about its investment in Together Energy.

The Chief Executive of the company, Paul Richards, admitted in a Channel 4 News interview that it would be very difficult for energy companies to survive if prices stayed high and the cap stayed in place. So far around 25 companies have collapsed including the seventh largest, Bulb.

Together Energy must find £12.4m to pay its renewable energy obligations. The money should have been paid by the end of October, but it must now be paid to the regulator, Ofgem, by January 27^th.

Liberal Democrat Finance Spokesperson Cllr Ian Marks also featured on the Channel 4 programme and says:

We have always opposed the Council's investment in Together Energy because we thought it too risky despite its worthy objectives of helping the Council's climate change objectives, combatting fuel poverty and creating jobs for less advantaged people. The recent turmoil in the market confirms we were right. However, a decision must be made as to what to do right now.

We support the Council working with the company to try to ensure its survival. It is in no-one's interests for the Council to bail out immediately. However unlikely, there may be someone out there who is prepared to invest in Together Energy on the grounds that if it survives, it could become a lucrative business due to there being a much-reduced number of players in the market.

If the company cannot pay off its debt to Ofgem and no other source of finance can be found, the Council faces the extraordinarily difficult choice between investing more money or letting it collapse. This is not an enviable decision, and they are truly caught between a rock and a hard place.