No.11: Harrogate energy firm CNG goes out of business

Harrogate energy company CNG became the victim of a global phenomenon this year when it ceased trading after 27 years.

Wholesale energy prices spiralled this year, and the impact was dramatic, with CNG one of more than 20 UK companies exiting the market.

Paul Stanley, chief executive of CNG, told the Stray Ferret the company failed because four of its main customers went out of business within two weeks, leaving it with unpaid bills.

Attempts to raise capital or sell the business were unsuccessful due to continued market volatility and high prices in the energy sector.

The company supplied about 15 to 20 retail energy companies through its wholesale business arm and also has around 50,000 business customers. About 150 jobs were lost.

CNG

CNG’s headquarters on Victoria Avenue

Swift collapse

Despite being regarded as a local success story for the majority of its 27 years, CNG’s collapse was swift and unforgiving.

Alarm bells began to ring on October 14 when Mr Stanley sent a letter to customers saying it was exiting the wholesale market. Two weeks later the company entered liquidation.

With Christmas approaching, it couldn’t have come at a worse time for staff.

A series of meetings were held between company bosses and worried employees, who had questions about redundancy pay.

Staff have been paid for November but were not expected to be offered a redundancy settlement until after Christmas through a government scheme.

A source told the Stray Ferret it was a “stressful time to have no income.”

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Administrators

CNG then entered the Supplier of Last Resort process operated by the government’s energy regulator Ofgem.

The SoLR procedure was established by Ofgem as a safety net to ensure that when a company stops supplying energy, affected customers are guaranteed continuity of supply through other companies.

However, businesses that were supplied gas by CNG were warned that their energy bills will be expected to rise.

Interpath Advisory has now been appointed as administrator, and around 30 staff are working to close the company.

CNG was also synonymous with Harrogate Town football club, becoming the first-ever sponsor of their Wetherby Road ground from 2008 until 2020 when it was rebranded the CNG Stadium.

The company was also well-known in Harrogate as a supporter of local charities and community projects.