Bulb and its 1.7 million customers were rocked after it emerged the energy supplier had entered administration.
As the UK’s sixth largest energy firm Bulb occupies 6% of the market share, but it has not been immune to the staggering rise in wholesale gas prices in 2021.
Many energy companies have already bitten the dust in the weeks and months following August’s increase, with others expected to follow before the end of the year.
And, while Bulb has been in negotiations for some weeks over potential rescue packages, the supplier announced it would be entering a ‘special administration regime’ on 22 November.
Here’s what it means for Bulb’s UK arm of the business and its 1.7 million members…
What is ‘special administration’?
Ofgem, the UK’s independent energy regulator, decided against placing Bulb in its supplier of last resort process, pursuing the special administration route with consent from government.
This means that, pending court order approval, energy administrators will be installed to run Bulb, which will be financed by the taxpayer, to the tune of £1.7bn, in the short term in the search for a solution.
The temporary measure is to protect essential services, such as gas and electric supply, that may otherwise be interrupted if normal insolvency processes were used.
A government statement said: "Ofgem made the assessment that based on the current market circumstances, a Special Administration Regime is the most suitable option to protect consumers, ensure security of supply, and maintain the long-term stability of the energy market."
Will there be an impact on Bulb customers?
At the moment, as Bulb has entered special administration, there will be no impact on its customers, meaning credit balances will be protected with the continued supply of energy.
There is no need to worry about the energy being cut off.
Customers are still customers of Bulb and don’t need to look for a new energy supplier, though they are free to do so if they wish under normal consumer rights.
There will not be an immediate rise to energy bills if energy administrators are appointed.
While the GB energy price cap limits the rate suppliers can charge for gas and electricity, though the cap limit has increased in recent weeks due to wholesale cost pressures.
Energy supplies are expected to be provided at the lowest reasonable price until administration ends - either through the rescue of the company, sale, or transfer of Bulb’s 1.7m customers.
Who is funding Bulb?
The UK government has confirmed it will fund Bulb while the company is in ‘special administration’.
The £1.7bn funding arrangement is temporary and the government is expected to recoup costs at a later date, as it endeavours the best outcome for Bulb’s customers and the taxpayer.
If anyone, including Bulb customers, are struggling to meet the costs of energy then help is available through a variety of government schemes, including:
Which UK energy suppliers have gone bust?
Pressure continues to mount on many energy firms, brought on by the rise in wholesale gas prices coupled with the energy price cap.
It has proved too much for some companies in recent weeks, with 22 UK suppliers biting the dust unable to find a way forward amid rising costs.
The companies are:
- Neon Energy Limited (16 November)
- Social Energy Supply Ltd (16 November)
- CNG Energy (5 November)
- Omni Energy Limited (2 November)
- MA Energy Limited (2 November)
- Zebra Power Limited (2 November)
- Ampoweruk Ltd (2 November)
- Bluegreen Energy Services Limited (1 November)
- GOTO Energy Limited (18 October)
- Daligas Limited (14 October)
- Pure Planet (13 October)
- Colorado Energy (13 October)
- Igloo Energy (29 September)
- Symbio Energy (29 September)
- Enstroga (29 September)
- Avro Energy (22 September)
- Green Supplier Limited (22 September)
- Utility Point (14 September)
- People’s Energy (14 September)
- PFP Energy (7 September)
- MoneyPlus Energy (7 September)
- HUB Energy (9 August)
Neil Lawrence, Director of Retail at Ofgem, said: “Ofgem’s number one priority is to protect customers. We know this is a worrying time for many people and news of a supplier going out of business can be unsettling.
“I want to reassure affected customers that they do not need to worry: under our safety net we’ll make sure your energy supplies continue. If you have credit on your account the funds you have paid in are protected and you will not lose the money that is owed to you. Ofgem will choose a new supplier for you and while we are doing this our advice is to wait until we appoint a new supplier and do not switch in the meantime. You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your tariff.
“Any customer concerned about paying their energy bill should contact their supplier to access the range of support that is available.”
New suppliers have been found for most of the firms to have gone bust, with industry regulations ensuring energy supply will continue for affected customers.
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