Ofgem to put energy supplier Bulb in special administration
Energy regulator Ofgem has applied to put failed energy company Bulb into special administration.
It asked a court on Wednesday to appoint an administrator after it collapsed on Monday, making it the 22nd supplier to fail since September due to a rapid rise in gas prices.
If the application is successful, Bulb, which has around 1.7m customers and is the seventh-largest energy firm in Britain, will be run by administrator Teneo until a potential buyer is found, or until its customers leave.
For now, Bulb is continuing to serve consumers despite the insolvency. Customers have been told that they do not need to do anything, and that there will be no change to their energy supply and credit balances.
Although more than 20 UK energy suppliers have fallen into administration in the last two months, Bulb is three times larger than any other firm that has failed.
Energy suppliers have not only been affected by a spike in prices, but a price cap on what they can charge customers, meaning energy has been sold for less than they bought it for. This cap is currently £1,277 ($1,704) a year on average and is set by Ofgem.
Read more: European stock markets mixed as COVID fears rise
The regulator said: “Ofgem has applied to the court to appoint a special administrator to run Bulb Energy Limited.
“Customers of Bulb do not need to worry. If a special administrator is appointed, they will see no disruption to their supply, their price plan will remain the same, and any outstanding credit balances, including money owed to customers who have recently switched, will be honoured.”
Meanwhile, the Department for Business, Energy & Industrial Strategy (BEIS) said: “Energy regulator Ofgem, with the government’s consent, has made an application to the court. We do not comment on ongoing court proceedings.
“The Special Administration Regime is a long-standing, well-established mechanism to protect energy consumers and ensure continued energy supply when a supplier fails.
“Bulb customers do not need to do anything, there will be no disruption to supply or current energy prices, and credit balances are protected.”
Read more: UK manufacturing orders strong despite supply chain issues
It comes as accountancy firm Price Bailey warned that a further 11 firms are at maximum risk of failing.
Matt Howard, partner at the firm, said: “This time next year we will have far fewer suppliers and higher household energy bills.
"Every time a supplier goes bust, the costs of the remaining suppliers increase, which makes those businesses more vulnerable.
"It's possible that only one or two of the challenger brands will be left standing alongside the big six this time next year."
Other industry experts have forecast the number of suppliers in the market to fall to just 10 by Christmas. That compares to 71 in January this year.
Watch: Energy crisis: Two more suppliers collapse as pipeline delay prompts fresh gas price spike