Gas price crisis: Octopus ordered to take on Avro's customers

Energy regulator Ofgem has ordered Octopus Energy to supply power to about 580,000 domestic customers of collapsed supplier Avro Energy.

Ofgem said outstanding credit balances, including money owed to both existing and former Avro Energy customers, will be honoured.

Six suppliers have gone bust recently, affecting nearly 1.5 million customers.

Ofgem added that domestic customers will also be protected by the energy price cap with Octopus, which limits how much firms can charge per unit of gas.

Octopus said on Sunday that it had offered to supply power to Avro's customers and hoped to make the change "as smooth and straightforward" as possible.

The supplier said it would be contacting all Avro customers over the next 48 hours. It stressed that all customers' energy supply will be maintained and that their money is safe.

The regulator has not yet appointed a new provider for Green customers, but all affected customers will still continue to receive energy.

But senior executives in the industry told the BBC the regulator knew full well that many smaller suppliers would not be resilient in the face of rises that should have been part of the regulator's stress testing of the sector.

Millions of customers face being moved to higher tariffs from bigger suppliers and the cost those larger companies incur from taking on new customers will be added to all consumers bills through an industry-wide levy.

The BBC has been told that ministers believe the current system for managing the failure of energy companies, which allows companies to recoup losses through the levy, is working satisfactorily - even though it will add costs to millions of customers' bills.