For a brief period, People’s Energy (often known as The People’s Energy Company) was one of the most promising ethical challengers in the UK energy market. Founded on principles of social justice and community ownership, it sought to disrupt the dominance of the “Big Six” and prove that an energy supplier could put people before profits.
However, its journey was not smooth. From a significant data breach in 2020 to its ultimate collapse during the 2021 energy crisis, the company’s story serves as a case study in high ambition meeting harsh market realities.
The Vision: What Was People’s Energy?
Based in Shawfair, near Edinburgh, People’s Energy was founded in 2017 by David Pike and Karin Sode. Unlike standard commercial entities, it was established as a Community Interest Company (CIC). This legal structure meant the business existed primarily to benefit the community rather than private shareholders.
The company crowdfunded its initial launch, raising over £450,000 from supporters who believed in their vision. By the time it ceased trading, it had grown to serve roughly 350,000 domestic customers and around 1,000 business accounts.
What Were They Trying to Achieve?
The founders set out with a radical mission statement: “Energy is a human right, not a luxury.” They aimed to restore trust in a sector plagued by high prices and poor service. Their strategy rested on three unique pillars:
- The 75% Profit Pledge: Their most headline-grabbing promise was to return 75% of the company’s profits to its customers. This rebate scheme was designed to function like a cooperative dividend, ensuring that the people paying for the energy benefited directly from the company’s success.
- Democratic Governance: People’s Energy wanted customers to have a genuine voice. They included customer representatives on their Advisory Board to influence key decisions, such as where to invest in renewable projects.
- Ethical & Green: They committed to providing 100% renewable electricity to all members, aligning financial fairness with environmental responsibility.
The Cyber Attack: A Major Setback
Before the financial crisis that would eventually close the company, People’s Energy faced a significant operational crisis. In December 2020, the company fell victim to a large-scale cyber attack.
What Happened?
On 16 December 2020, hackers gained unauthorised access to the company’s internal databases. This was a massive blow to a company whose brand was built entirely on trust and community care.
What Data Was Stolen?
The breach was extensive, affecting nearly all of its (then) 270,000 current and former customers. The compromised data included:
- Full names and residential addresses.
- Dates of birth.
- Phone numbers and email addresses.
- People’s Energy account numbers and tariff details.
- Gas and electricity meter IDs.
Was Financial Data Safe?
For the vast majority of domestic customers, financial data (such as bank account numbers and sort codes) was not accessed. However, the company admitted that for a small group of roughly 15 business customers, financial details had been compromised.
The company immediately notified the Information Commissioner’s Office (ICO), the police, and the energy regulator, Ofgem. While they closed the security gap quickly, the incident shook consumer confidence and left thousands of customers vulnerable to phishing scams using the stolen personal details.
The Collapse: What Happened to the Company?
Despite recovering from the cyber attack and continuing to grow its customer base, People’s Energy could not survive the economic tsunami that hit the UK energy sector the following year.
On 14 September 2021, People’s Energy ceased trading.
The Perfect Storm
The collapse was driven by factors largely outside the company’s control, which affected dozens of other small suppliers:
- Record-Breaking Wholesale Prices: In late 2021, global gas prices surged by over 250%.
- The Price Cap Trap: The UK government’s energy price cap (the maximum amount suppliers could charge customers) was set significantly lower than the cost of buying the energy on the wholesale market.
- Unsustainable Margins: As a CIC committed to keeping bills low, People’s Energy operated on razor-thin margins. They did not have the massive cash reserves required to buy energy at high prices and sell it to customers at a loss for months on end.
The Aftermath
When the company failed, the regulator Ofgem triggered its “Supplier of Last Resort” (SoLR) process to ensure no one was left without power.
- Transfer to British Gas: The company’s 350,000 domestic customers were automatically transferred to British Gas.
- The End of the Rebate: Sadly, the dream of the 75% profit rebate died with the company. The profits that customers had hoped to see returned to them never materialised, as the company had to fold before it could reach long-term profitability.
Summary
People’s Energy remains a poignant example of “what could have been”. It successfully proved that there was a massive public appetite for an ethical, customer-owned energy model. However, the combination of a damaging cyber attack in 2020 and the unprecedented volatility of the global energy markets in 2021 proved too much for the community-focused supplier to withstand.
Frequently Asked Questions
Why did People’s Energy go bust?
People’s Energy ceased trading due to a crisis in the energy market in late 2021. Global wholesale gas prices rose to record levels, but the UK energy price cap prevented suppliers from passing these costs on to customers immediately. This meant People’s Energy was forced to sell energy at a significant loss, which was not sustainable for a business operating on thin margins.
Who took over People’s Energy customers?
Following the collapse in September 2021, the energy regulator Ofgem appointed British Gas as the Supplier of Last Resort (SoLR). All domestic customers were automatically transferred to British Gas to ensure their energy supply was not interrupted.
Did People’s Energy customers get their credit balances back?
Yes. Under Ofgem’s safety net regulations, British Gas was required to honour the credit balances of all domestic customers. If you were in credit when the company failed, this money should have been credited to your new account with British Gas.
Was financial data stolen in the 2020 cyber attack?
For the vast majority of customers (specifically domestic households), financial data such as bank account numbers and sort codes was not accessed during the breach. However, personal information including names, addresses, dates of birth, and phone numbers was compromised. The company admitted that a very small number of business accounts (approximately 15) did have financial details accessed.
What happened to the 75% profit rebate?
The 75% profit rebate was a pledge to return future profits to customers. Because the company ceased trading before it could achieve long-term profitability, there were no profits to distribute. Consequently, no rebates were paid out.
