The sale process for Bulb Energy Limited concluded on 20 December 2022, ending a period of special administration that began on 24 November 20211. The National Audit Office, in a report published on 29 March 2023, states that Bulb's 1.5 million customers have been transferred to a new provider, HiveCo, owned by the Octopus Energy Group1.
Bulb announced in November 2021 that it could no longer continue trading, and was taken into the Special Administration Regime (SAR) on 24 November 20211. The NAO reports that the sale process lasted for 10 months and was concluded on 20 December 20221. The SAR process is expected to cost the taxpayer an estimated £3.02 billion gross as of 31 January 2023, and the government expects to recover all the taxpayer funding1.
The NAO sets out five objectives that the then Department for Business, Energy & Industrial Strategy identified for the Bulb process: to ensure Bulb customers continue to be protected; to minimise cost to the consumer; to prevent or minimise negative impacts on the wider energy market; to deliver the mergers and acquisitions process; and to exit from the SAR as quickly as possible and ensure that all costs are recovered1.
"Bulb's 1.5 million customers continue to be protected and the sale process, which lasted for 10 months, was concluded on 20 December 2022."
The NAO concludes that the government achieved its objectives to maintain supplies to Bulb customers and to complete the sale process, but that it is too early to conclude on the remaining objectives, including minimising cost to the consumer and ensuring all costs are recovered1. The report notes that the government decided to take on the risks of rising and falling wholesale energy prices, and that this decision resulted in an unplanned taxpayer benefit from the reduction in wholesale energy prices between the peak in August 2022 and prices in January 20231. It adds that several risks remain to the recovery of taxpayer funding, which may ultimately be absorbed by household customers1.
On 7 February 2023, BEIS was abolished as part of wider machinery of government changes, and the new Department for Energy Security & Net Zero assumed responsibility for BEIS's energy portfolio, including the matters discussed in the report1.
Why it matters for households
Bulb was one of a number of energy supplier failures that moved household accounts into a government-backed process rather than ordinary administration. For the 1.5 million households involved, supply continued and accounts moved to HiveCo, owned by the Octopus Energy Group, rather than being cut off1. The NAO's finding that risks to recovering taxpayer funding may ultimately be absorbed by household customers is the part of the report with the most direct bearing on energy bills and energy independence: it indicates that the cost of the rescue is not settled, and that some of it could return to billpayers rather than being borne solely by the Exchequer1. The report does not state how any such cost would be recovered, and no mechanism for passing it to households has been reported1.
What happens next
The NAO report was published on 29 March 2023, after the sale concluded1. It states that it is too early to conclude on the objectives covering cost to the consumer, impacts on the wider energy market, speed of exit from the SAR and recovery of all costs1. Responsibility for the matters covered by the report passed to the Department for Energy Security & Net Zero on 7 February 20231. No further dated steps are set out in the report1.
Sources1 cited
- Investigation into Bulb Energy - NAO report, nao.org.uk