Government bails out Bulb with £1.7bn support
The move, which follows Bulb announcing its insolvency on Monday, makes the firm the biggest victim so far of the energy industry crisis which has seen more than 24 energy suppliers go bust since August.
Teneo has been appointed special administrator of Bulb. Teneo will work with the existing Bulb management team and broader stakeholders. The special administration regime enables a business to continue to trade as usual and if circumstances permit, to be sold at the appropriate time, in full or in part. Interpath has been appointed administrator of Simple, Bulb’s parent company.
At a court hearing on Wednesday to formalise the move it was revealed that the government had set aside £1.7bn to support the work of Teneo and allow Bulb to continue to trade for now.
Due to its size Bulb will carry on supplying customers with energy for the time being, unlike other bust suppliers whose customers have been transferred to other energy companies under Ofgem’s Supplier of Last Resort regime.
Bulb customers won’t experience any change or disruption to their energy supplies as the appointment of energy administrators will see Bulb continue trading and fulfilling the terms of its supply licence.
Bulb customers, including those with prepayment meters, don’t need to do anything and customers’ existing credit balances are protected.
Greg Hands, energy minister, said: “Our overriding priority is to protect consumers and the appointment of administrators will ensure the supply of energy remains normal to Bulb customers across the country, providing vital reassurance while an enduring solution is agreed.
“The administrators will now take temporary charge of operating Bulb, and that includes ensuring if a new owner cannot be found customers are safely moved to another supplier.”
The current increase in wholesale energy prices is driven by a number of factors including the recovery of global energy demand since it fell sharply at the beginning of the pandemic.
Special administration regimes are used to protect essential services that may otherwise be interrupted if normal insolvency processes were followed.
Lisa Barber, Which? home products and services editor, said: “This move should provide reassurance to any of Bulb’s 1.7 million customers who may have been concerned about the collapse of their provider.
“We recommend Bulb customers to do nothing and wait for more information about the special administration process. Its customers will continue to see their bills limited by the price cap, which is likely to be the best deal for them at the moment. If you have already arranged to switch to or from Bulb, this will continue as planned.”