Warrington Council-backed Together Energy delays £12.4m Ofgem payment

An energy firm which is part-owned by a council has said delaying a £12.4m payment to regulator Ofgem was "in the best interest of the company".

Warrington Borough Council spent £18m on a 50% stake in Together Energy in 2019 and later lent it a further £20m.

The company was due to pay the amount plus interest to Ofgem by 31 October to cover its renewable energy obligations.

A spokesman said it was "financially stable" but delaying the payment was the right thing to do "at this time".

The delay comes as many energy companies have been hit by a sharp rise in wholesale gas prices, with a number collapsing in recent weeks.

Together Energy was one of seven companies issued with a provisional order by Ofgem last week, in which it required the firm to make the payment by 31 October.

The regulator issues such orders when it thinks energy companies may be in breach of their licence.

A failure to pay can result in further enforcement action, such as the revoking of a supplier's licence.

The regulator said it was told by the company in September that it was in a position to make the payment, but was further informed on 28 October that it could not pay in full.

In October, Warrington councillors said the investment in the company was "as good as it can be in the circumstances".

They backed plans to proceed with options in relation to the investment, but have not publicly said what those options are.

Opposition councillors on the Labour-run authority have called for "complete transparency" on the council's strategy for the company.

Warrington Borough Council said as a shareholder of Together Energy, it had "been reassured that the board... is satisfied that the company is financially stable and solvent".

A spokesman added that while it was the firm's obligation to pay the fee, the council was "satisfied that not currently making this payment is in the best interest of the company at this time".

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