Your Cheap Energy Provider Went Bankrupt: What Actually Happens Next
If your electricity or gas provider goes insolvent, and it's a genuinely recurring risk, dozens of discount providers have collapsed in recent years, your supply is never actually at risk: the local Grundversorger, SWM in Munich, automatically steps in under Ersatzversorgung the moment deliveries stop. That fallback is deliberately more expensive than a normal contract and, under § 38 EnWG, legally capped at three months. If you haven't actively signed a new contract by then, you roll over into standard Grundversorgung automatically, at Munich rates, not into a gap in service. What actually needs your attention in the meantime is financial, not logistical: stopping payments to the collapsed provider, documenting your own meter reading, and registering any prepaid credit or bonus you're owed with the insolvency administrator before that claim window closes.
The Official Rule
It’s a genuinely recurring risk, not a one-off scare story: energy providers offering aggressive discount rates have collapsed repeatedly in recent years, squeezed between fixed-price customer contracts and volatile wholesale energy costs. What matters for your household, though, is that German energy law was built specifically to make sure a provider’s insolvency never actually interrupts your electricity or heating. According to Verbraucherzentrale’s official guidance, the moment a provider stops delivering, the local Grundversorger, Stadtwerke München (SWM) for Munich addresses, automatically takes over under a mechanism called Ersatzversorgung, and the network operator (Netzbetreiber) is the one that notifies you this has happened.
This fallback is deliberately not a bargain, and it isn’t meant to be permanent. Under § 38 EnWG, Ersatzversorgung is capped at three months from when it starts. The supplier can also adjust its Ersatzversorgung prices on the 1st and 15th of any calendar month without the notice period a normal contract would require, which is exactly why it’s structured as a bridge rather than something to settle into. If those three months pass and you haven’t actively signed a new contract with any provider, you’re automatically rolled over into ordinary Grundversorgung, not left in a gap and not cut off, just moved into the same default tariff you’d have fallen into if you’d never signed a contract at all.
| Question | Answer |
|---|---|
| Does your power or gas actually get cut off? | No, Ersatzversorgung starts automatically |
| Who steps in? | The local Grundversorger (SWM in Munich) |
| How long can Ersatzversorgung last? | Capped at 3 months under § 38 EnWG |
| What happens after 3 months with no new contract? | Automatic rollover into standard Grundversorgung |
| Is prepaid credit with the old provider automatically refunded? | No, it must be actively registered with the insolvency administrator |
What genuinely needs your attention is financial, not logistical. The Verbraucherzentrale and ENTEGA’s consumer guidance both point to the same handful of concrete steps: cancel your SEPA direct debit or standing order to the now-insolvent provider in writing, so no further payments go out to a company that may never deliver services for them. Read and document your own meter reading, reporting it to the network operator and your new Ersatzversorgung supplier, since that number is what separates your final bill from the old provider and your first bill from the new one. And get the actual start date of your Ersatzversorgung confirmed in writing, which matters if there’s ever a dispute about which company billed you for which period.
Any prepaid credit, bonus, or Guthaben with the collapsed provider doesn’t come back automatically. It has to be formally registered with the insolvency administrator handling the case, the same process any other creditor would go through, and whether you actually recover anything depends on what’s left in the insolvency estate. Skipping that registration step guarantees you get nothing back, which is why it’s worth doing even for a modest amount.
What Real People Say
Coverage of recent provider collapses, like infranken.de’s reporting on a provider insolvency that affected roughly 13,000 households nationwide, consistently frames these collapses as a symptom of the same underlying squeeze: smaller providers offering attractively low fixed rates while having to buy the actual energy on a volatile wholesale market, a gap that becomes unsustainable the moment prices spike. For an affected household, the practical lesson isn’t to avoid discount providers altogether, but to actually use the Ersatzversorgung window to shop around immediately rather than waiting, since the same reporting also confirms the pattern holds consistently: automatic fallback supply, followed by an automatic rollover into standard rates if nobody actively switches within roughly three months.
The other consistent thread across consumer accounts of these collapses is that people who acted immediately, canceling payments and documenting their meter reading in the first few days, had a noticeably cleaner transition and a stronger position when it came to registering any outstanding credit, compared to people who assumed the fallback would simply sort itself out and only engaged with the process weeks later.
Step by Step
- Confirm your supply hasn’t actually been interrupted, it hasn’t, Ersatzversorgung through your local Grundversorger, SWM in Munich, starts automatically the moment your provider stops delivering.
- Cancel your SEPA direct debit or standing order to the collapsed provider immediately, in writing, so no further payments go out.
- Read and document your own meter reading, reporting it to both the network operator and your new Ersatzversorgung supplier.
- Get your Ersatzversorgung start date confirmed in writing from the Grundversorger, for your own records.
- Register any prepaid credit or signup bonus with the insolvency administrator as soon as you know who’s handling the case, rather than assuming it’s simply lost.
- Actively compare and switch to a new contract within the three-month window, rather than waiting for the automatic rollover into standard Grundversorgung rates.
Compliance Note
This page explains the general framework around energy provider insolvency and Ersatzversorgung under the EnWG, but this is not legal or financial advice, and specific timelines or costs can vary by case. For your specific situation, confirm current details with your network operator, Stadtwerke München, or the Verbraucherzentrale Bayern.
FAQ & Common Pitfalls
Will our electricity or heating actually get cut off if our provider goes bankrupt?
No, this is the single most important thing to understand before anything else. German energy law requires a designated local Grundversorger, SWM in Munich's case, to automatically step in and keep supplying you the moment your actual provider stops deliveries, a mechanism called Ersatzversorgung. The network operator notifies you that this has happened, but there's no gap where your home is actually without power or gas while the paperwork sorts itself out.
How much more does Ersatzversorgung actually cost compared to what we were paying?
It's genuinely more expensive, deliberately so, since it's designed as a temporary, no-questions-asked fallback rather than a competitive offer, and the supplying company can adjust its Ersatzversorgung prices on the 1st and 15th of any month without advance notice. The exact markup varies by provider and isn't fixed by law, which is precisely why using the Ersatzversorgung window to actively compare and switch to a normal contract, rather than waiting it out, is worth doing rather than treating it as a set-and-forget fallback.
What happens if we don't do anything for the full three months?
Under § 38 EnWG, Ersatzversorgung is legally capped at three months from when it begins. If you haven't signed a new contract with any provider by the end of that window, you're automatically rolled over into standard Grundversorgung, the same default tariff you'd fall into if you'd simply never signed a contract at all, at Munich's regular Grundversorgung rates. You won't lose service and you won't be left in limbo, but you'll likely still be paying more than a comparison-site contract would cost, so the three-month window is worth using actively rather than passively.
We had prepaid credit or a signup bonus with the old provider. Is that money just gone?
Not automatically gone, but it doesn't come back on its own either, you have to actively claim it. Per the Verbraucherzentrale's guidance, any outstanding credit or bonus needs to be formally registered (angemeldet) with the insolvency administrator handling the case, the same way any other creditor would file a claim in an insolvency proceeding. Whether you actually recover anything, and how much, depends on the insolvency estate, but skipping this registration step guarantees you recover nothing, so it's worth doing even if the amount seems small.
What should we actually do in the first few days after finding out our provider is insolvent?
Stop your SEPA direct debit authorization or standing order to the collapsed provider in writing, so no further payments go out to a company that may not deliver anything for them. Read and document your own meter reading and report it to both the network operator and the new Ersatzversorgung supplier, since that reading is what separates your old provider's final bill from your new one. Get the start date of your Ersatzversorgung confirmed in writing from the Grundversorger. Then use the following weeks to actually compare and switch providers, rather than letting the three-month clock run out passively.