ENERGY giant British Gas is to take on the 350,000 customers that were with Scottish challenger People's Energy, it has been confirmed.

The Midlothian company folded last week, four years after its launch. It's the second largest UK energy firm to fail since January.

Founders Karin Sode and David Pike styled the community interest company as an ethical alternative to the "big six" suppliers.

Now it's one of those that will take on People's Energy's 350,000 domestic customers and 1000 non-domestic clients. This includes those supplied through the East Lothian Energy initiative, run in association with East Lothian Council.

The appointment has been made by regulator Ofgem following a competitive process.

Outstanding credit balances, including money owed to those affected, will be honoured. For existing People’s Energy customers, energy supplies will continue as normal after they switched over to British Gas on September 19. Customers will be contacted over the coming days and those who wish to switch are advised to wait until the transfer has been completed. No exit fees will be charged to anyone who opts for another supplier. 

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Neil Lawrence, Ofgem’s director of retail, said: "I am pleased to announce we have appointed British Gas as the new supplier for customers after People’s Energy entered insolvency. We understand that this news may be unsettling for customers, however they do not need to worry. Their energy supply will continue as normal, and all domestic customer credit balances held on their accounts will be protected by British Gas.  

"Your energy supply will not be interrupted. British Gas will be in contact with customers next week with next steps. Once transferred to British Gas, customers can ask to be put onto another tariff, but should customers wish to switch, we advise waiting for the transfer from People’s Energy to be completed.” 

The supplier of last resort process will allow British Gas to recover the additional costs of taking on People's Energy's customers, where appropriate.

The firm, a subsidiary of Windsor-based Centrica, has committed to do everything it can to minimise those costs. 

In summer 2017, People's Energy secured almost £500,000 from more than 2000 people in a successful crowdfunder. It promised that 75% of the profits would be returned to customers in an annual rebate, with 100% of electricity taken from renewable sources. At the time, it said: "We will be the first fully transparent and open energy company in the UK. We share decisions and wholesale energy costs openly, and have customers sitting on the board."

In a message to customers on Friday, Sode and Pike said: "We had a mission to provide fair, affordable and green energy for all and to help alleviate fuel poverty. We are hugely saddened that we will no longer be able to deliver on these ambitions.

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"Energy suppliers are facing a very difficult time at the moment due to record high wholesale energy prices that are making it incredibly challenging to operate. Four suppliers have ceased to trade in the past week alone, and there are likely to be more to follow. It is a difficult time for all, and our heart goes out to our colleagues who are now at risk of losing their jobs, along with employees from those other energy suppliers."

They went on: "Whether you have been with People’s Energy for just a short time or for a long time, possibly even supporting us through crowdfunding the company at the very beginning, we want you to know that we truly valued your custom. Thank you."