Spark Energy

Spark Energy is an electricity and gas supplier in the United Kingdom, established in 2007 and headquartered in Selkirk, Scottish Borders. Its operating company Spark Energy Supply Ltd entered administration in November 2018, and industry regulator Ofgem appointed OVO Energy to take over Spark Energy's 290,000 customer accounts; OVO continues to run Spark as a separate brand.

Spark Energy
IndustryUtilities
Founded2007 (2007)
FounderChris Gauld & PJ Darling
Defunct23 November 2018 (2018-11-23)
Headquarters
Selkirk
,
Scotland
Area served
United Kingdom
Key people
  • Chris Gauld (CEO)
Products
  • Natural gas
  • Electricity
Number of employees
400 (2018)
ParentOVO Energy
Websitesparkenergy.co.uk

History

Spark Energy began in 2007 as a small start-up company.[1] The board's background was in the letting industry[2] and they started Spark Energy to fill a gap in the utility market to meet the needs of letting agents, landlords and tenants.[3] The company was established by Canadian entrepreneur PJ Darling, after research into the utilities and property management markets. Co-founder Chris Gauld was the primary driver and leader of the business during the early stages.

Spark was based in a former converted mill building in Town hill after moving from Penlan in 2016. The company made its first profit in 2013.[4] In January 2014 the firm signed a deal with Morgan Stanley.[5] Further growth occurred, which the company attributed to investment in its customer services and marketing.[4] Some rebranding also took place, including the introduction of the tagline 'Bringing Energy to Life'.[6]

In Spring 2014, Gauld was appointed as chief executive[7] after Darling sold his stake in the business. In 2014 they were placed 23rd on the Sunday Times Fast Track 100, the highest-ranked Scottish company on the list.[8]

Spark had a long relationship with both Scottish Enterprise and the Scottish Investment Bank, with the latter having invested around £855,000 with the company since 2008.[9]

In 2015, Spark Energy reported a turnover of more than £80 million.[10] As of July 2015 the company was thought to be one of the five largest employers in the Scottish Borders, with over 300 staff based at their offices in Selkirk,[1] 120 of whom are in customer care.[11] In August 2015 the company recruited three senior executives, increasing the size of its leadership team.[3] The company was granted a temporary derogation from regulator Ofgem from 22B.2(b) and paragraph 4 of SLC 22B of its gas and electricity supply licences in respect of the Affordable Social Housing Prepayment Tariff.[12]

In June 2016, the company announced that a management buyout, led by CEO Chris Gauld and CFO Hamish Osborn, was close to completion in a deal estimated to be worth in excess of £50 million.[13]

In 2016, the company acquired a 50% stake in a Sussex-based telecoms company, Home Telecom Ltd, for an estimated £3 million, as part of a mutual and existing relationship with Country Wide who owned the other 50% of the business. This saw the firm acquire approximately 14,000 telecoms customers.

Spark Energy Supply ceased trading on 23 November 2018[14] following financial difficulties, including non-payment of £14m to energy regulator Ofgem under the Renewables Obligation scheme.[15] Ofgem appointed Bristol-based OVO Energy to take over the 290,000 customer accounts, and OVO also acquired Spark Energy Limited.[16][17]

OVO continues to use the Spark brand, and retained the company's Selkirk offices and staff.[18]

Issues

While establishing itself in the marketplace, the company had attracted a substantial number of complaints.[19] Their business model meant that tenants did not get to choose their supplier, with Spark Energy inheriting customers from property owners, demanding payments and forcing customers to have the firm as their energy supplier.[20] BBC Radio 4’s You & Yours consumer programme revealed that Spark Energy employees had posed as some of these customers, moving people with chronic debts to other energy firms without their knowledge, using their personal details.[20] In 2015 they were fined £250,000 by Ofgem, after they were judged to have mistreated customers during the 2010–2013 period by impersonating customers to switch 'undesirable' customers from whom payment was difficult to collect, to other suppliers, a term known in the industry as 'erroneous transfers'.[11]

The company rebranded and undertook a several-year-long campaign in an attempt to revive their image and customer service practices, and in the 2014 Which? Switch energy satisfaction survey, Spark Energy outranked all of the "big six" providers.[7] However, in the 2017 Which? survey Spark was ranked 30th out of 31 providers.[21]

References
  1. "Spark set to take on 60 new staff". Selkirk Weekend Advertiser. 24 July 2015. Retrieved 21 November 2015.
  2. "Chris Gauld, co-founder, Spark Energy: plugged in to power". The Financial Times. 12 April 2016. Retrieved 12 April 2016.
  3. Wright, Scott (13 August 2015). "Spark Energy launches job drive". The Herald. Retrieved 21 November 2015.
  4. "Spark Energy sees turnover rise sharply". The Daily Telegraph. 26 May 2013. Retrieved 13 January 2016.
  5. Jeff, Dominic (23 January 2014). "Spark Energy lands Morgan Stanley contract". The Scotsman. Retrieved 21 November 2015.
  6. West, Gillian (15 April 2014). "Spark Energy rebrands to take on the 'Big Six' following Morgan Stanley deal earlier this year". The Drum. Retrieved 21 November 2015.
  7. McConnell, Ian (25 June 2014). "Scottish Investment Bank funding for Spark Energy up to £855,000". The Herald. Retrieved 21 November 2015.
  8. Argo, Andrew (8 December 2014). "Growth of Forfar-based RMEC earns recognition in Sunday Times Virgin Fast Track 100 league table". The Courier. Retrieved 21 November 2015.
  9. "Spark Energy plugs in to a bright future". www.scottish-enterprise.com. Retrieved 19 January 2016.
  10. Wright, Scott (24 January 2015). "Spark sees profits soar beyond £1 million". The Herald. Retrieved 21 November 2015.
  11. "Selkirk firm Spark Energy to pay £250,000 for rules breach". BBC News. 16 February 2015.
  12. "Energy watchdog sanctions new pre-payment tariff | News | Inside Housing". www.insidehousing.co.uk. Retrieved 19 January 2016.
  13. "Management buyout bid at Selkirk-based Spark Energy". BBC News. Retrieved 28 July 2016.
  14. "SPARK ENERGY SUPPLY LTD". Companies House. Retrieved 26 April 2019.
  15. "Spark Energy Supply ceases trading". BBC News. 23 November 2018. Retrieved 23 November 2018.
  16. "Spark Energy Limited: filing history". Companies House. 28 November 2018. Retrieved 26 April 2019.
  17. "Ofgem appoints Ovo Energy to take on customers of Spark Energy Supply Limited". Ofgem. 27 November 2018. Retrieved 26 April 2019.
  18. "Energy supply switch going 'smoothly'". BBC News: South Scotland. 28 January 2019. Retrieved 26 April 2019.
  19. "Selkirk-based Spark Energy investigated by Ofgem". BBC News. 28 June 2013.
  20. Neal, John (23 December 2013). "Spark Energy 'impersonated customers' to remove 'debtors'". You & Yours. BBC.
  21. Ingrams, Sarah. "Which? energy survey results". Which?. Retrieved 19 June 2018.
This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.