Bulb, an energy company, will go into administration

Publiziert
Image source, Getty Images

Bulb Energy has over 1.7 million customers and announced today that it will go into administration.

After a steep rise in wholesale gasoline prices, it is now the UK’s largest energy company facing difficulties.

Bulb is the first company in the energy sector to be put into special administration. This means that it will run under the control of the regulator Ofgem.

Ofgem explained that Bulb’s customers do not have to be concerned – Bulb will still operate as usual.

Customers will not experience any disruption in their supply, and their account as well as their tariff will remain the same. Bulb staff will continue to be available for queries and calls.”

This special administrative measure can only be used when Ofgem cannot find another company that will take over the customers of an energy firm. It stated that it planned to petition a court to name an administrator to manage the company.

Bulb claimed that all energy supply were secure and that credit is protected.

Bulb employs over 1,000 people and is the UK’s seventh largest energy company. The company has struggled to raise its funds for several weeks.

‘Service continues’

Ofgem established the Special Administrator Regime (SAR) to help energy companies that go bankrupt but are too large to transfer their customers to other firms.

  • What should I do in the event that my energy supplier fails?

Its purpose is to keep financial failure from spreading through the industry.

The SAR program allows the government to make loans and grants to companies while they sort out their future.

This could be in the form of a company taking over the business, or selling off parts of it.

For the past 10 years, special administration provisions have been included in law to deal with the sudden collapse of an important player within the UK’s energy sector.

It was not needed before.

This is an important moment in this crisis. Bulb customers should be calm, and in essence do nothing.

The rules stipulate that special administrators, which are not ordinary administrators, have an obligation to take into account the interests of consumers and creditors who are owed Bulb money.

This gives customers short-term security that their supply, their current tariff and credit balance will remain the same. This means that switching to a different provider would be costly and a poor idea.

Some of this certainty will diminish over the long-term as the future sale of or winding-up decisions of the company are made.

Sarah Coles from Hargreaves Lansdown is a personal finance analyst.

Nearly four million of their customers have suffered losses as a result of rising wholesale gas prices.

Ofgem stated Monday that British Gas would accept customers from Neon Reef or Social Energy Supply. They had 35,000 combined customers.

According to firms, the UK’s Energy Price Cap – which restricts what providers are allowed to charge – has only exacerbated this problem.

Justina Miltienyte is an expert in energy policy at Uswitch. She said that the collapse of Bulb was the tipping point of the UK’s energy crisis.

The failure of a business model was not the cause. Bulb’s death was caused by Bulb’s inability to abide by the structure of the energy market, which the government has set up with a price cap.

Chief executive at Scottish Power Keith Anderson said that Bulb’s collapse into administration “should focus minds on how markets operate” and “why so few companies were allowed to act so recklessly for this long”.

He said, “The government had to intervene to safeguard customers from an unprecedented failure and will need to spend taxpayers’ funds to do so.”

“Not surprising, but disappointed”

John Arnold, who was Bulb’s customer since Potters Bar in Hertfordshire many years ago, said that while he was not surprised at the difficulties of the supplier given the market today, he was disappointed by their decision to go into administration.

I have had good experiences dealing with them. “I like their green credentials, and their tariffs are very fair,” said the 69 year-old.

Deborah Davenport of Easton on the Hill (East Midlands) said Bulb’s customer services were “absolutely amazing”.

Ms. Davenport, who was renovating her cottage with solar panels and new gas supplies, said that she had some issues with meters and bills. Bulb however, quickly resolved the problem.

Bulb was “just so pragmatic to deal with” as compared to other energy companies that she feels “do not care for people”.

“I thought that Bulb was my voice.”

Bulb in London, which serves 5-6% of UK’s energy market, stated that it couldn’t raise financing from investors because it had been hit by the crisis.

Bulb stated on its website that the rising energy crisis has worried investors. Bulb added, “While wholesale prices remain so high and price caps – intended to protect customers- are currently mean suppliers supply energy at a substantial loss.”

Bulb, which was established in 2015 as a competitor to the Big Six energy companies, claimed it could offer more affordable and cleaner electricity than other competitors.

The company grew rapidly and established divisions in France and Spain. These will also continue trading.

According to Bulb’s latest available accounts, in the year to 31 March 2020 the company made losses of £63m. It also had a £55m loan facility due for repayment on 31 December this year.

Bulb appointed Lazard as an investment bank to investigate restructuring options. This included either a joint venture, merger, or cash injection from existing shareholders.

What happens to your energy supplier if it goes under?

  • Even if an energy supplier closes, customers will continue receiving gas and electricity. Ofgem can transfer your account to a different supplier but this may take several weeks. The new supplier will then reach out to you to inform you about what’s happening with your account.
  • Waiting to hear back from your new supplier? Check your current balance, if you can, download any bills and take a photograph of your meters reading.
  • Citizens Advice advises that if you have a direct debit account, it is not necessary to cancel immediately. You can cancel your account only after it is established.
  • Your money will be returned to you if you have credit. You will still need to repay the money to the supplier you used if you are in debt.

Learn more about what the best next steps are here.

Have you been a Bulb energy customer? Email us to share your experience. [email protected].

If you would like to talk to a BBC journalist, please include your contact number. These are the ways you can get in touch with us:

  • WhatsApp: +44 7756 165803
  • Tweet: @BBC_HaveYourSay
  • Send pictures and videos
  • Please read our terms & conditions and privacy policy

If you are reading this page and can’t see the form you will need to visit the mobile version of the BBC website to submit your question or comment or you can email us at [email protected] All submissions should contain your name, address and age.



Source: BBC.com

Share Your Comment Below

[gs-fb-comments]

LEAVE A REPLY

Please enter your comment!
Please enter your name here