Bulb appoints a special administrator
Energy supplier Bulb has announced they are going into special administration, as the energy crisis looks set to continue. For their 1.7 million customers, it comes as unsurprising news as wholesale gas prices continue to rise.
The appointment of a special administrator will be a first for Ofgem, who have been able to deal with previous insolvent suppliers through the appointment of a Supplier of Last Resort (“SoLR”). Bulb is too large for the SoLR process and so Ofgem have had to resort to the special administration process.
Our energy specialist Tim Speed said:
“The appointment of an energy administrator is a drastic step for Ofgem and is another indicator as to the extent that the energy market is struggling.
What is a Supplier of Last Resort?
“A Supplier of Last Resort (SoLR), which involves another company taking over supply to the failed supplier’s customers, is the default action for the majority of collapsed energy companies. However, the size of Bulb means this isn’t viable. Although the process has existed for some time, an energy supply company administration has never been implemented before, showing how dire the current situation is. The aim is to ensure supplies are continued at the lowest possible cost, with the administrator able to split up the existing business by transferring all or part of it to other companies, when appropriate.
“Other energy suppliers that are concerned about their future must act quickly. By identifying the problem and seeking professional advice early on, it may be possible to secure an investment or sale that guarantees a future for the business. However, this does take time, so it’s important to address any issues while there is still sufficient cashflow.
“Ofgem and the Government need to make serious decisions about the future running of the market, because the events of recent months cannot be repeated.”
Bulb speak out on rising energy costs
From a statement on their official blog, Bulb say “When we founded Bulb in 2015 it was because we thought energy customers deserved a better deal. We believed strongly that we should do things differently, and that by building a talented team and creating our own technology we could make energy simpler, cheaper and greener.”
“Wholesale prices have skyrocketed and continue to be extremely volatile. The gas supply shortage combined with lower exports from Russia and increased demand means they remain high and unpredictable. Prices have hit close to £4.00 per therm recently, compared with 50p per therm a year ago”
Are you a struggling energy supplier?
We have acted for insolvent suppliers who have been able to sell their assets to other suppliers. We have also acted for suppliers who have entered the SoLR process.
If you are an energy supplier or are advising an energy supplier we would be more than happy to talk to you in order to discuss available options.
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Tim is a litigator who adopts a robust and practical approach to claims and is valued as a trusted advisor to his clients.