BULB GOES OUT
New fears for energy sector as UK’s seventh biggest supplier goes bust
BRITAIN’S seventh biggest energy company Bulb collapsed into administration yesterday amid ‘dark times’ for the industry.
It is being nationalised on a temporary basis after surging wholesale gas prices meant it made big losses on each customer.
Special administrators are being appointed to run the company, which serves 1.7million households.
Experts said supplies of gas and electricity are safe, but customers face increases in bills – potentially more than £350 a year – with more to come.
The cost of running Bulb is expected to hit millions of pounds, which will be covered by taxpayers or passed on to houseyears. holds through a levy on bills. Wholesale prices have surged 250 per cent this year as the global economy recovers from the pandemic amid a squeeze on supplies to Europe from Russia.
The collapse of Bulb is seen as a turning point for the industry which has already lost 23 smaller firms, with more on the brink. Analyst Robert Buckley, of Cornwall Insight, said it was the biggest energy failure in 20 He added: ‘The failure of Bulb highlights the stress suppliers have been under this autumn.’
Bulb blamed the UK Government’s price cap, which protects consumers, for its failure.
Companies are paying much more for gas and electricity than they are allowed to charge customers. The cap is £1,277 a year for a typical user. Lenders and investors have withdrawn support, forcing Bulb’s parent company, Simple
Energy, into administration. Its businesses in France, Spain and the US will continue trading.
Previously customers of collapsed firms have been swiftly moved to a new supplier. In thiscase there is no realistic prospect of finding an alternative quickly because Bulb has so many users.
Instead the business will be run under a state-sponsored regime in the hope that another firm will step forward. Gillian Cooper, of Citizens Advice, said: ‘When the country’s seventh largest supplier fails, serious questions must be asked about the state of the market and how it’s regulated.’
Lisa Barber, of consumer group Which?, said: ‘The collapse...demonstrates the seismic impact the energy crisis is having on the industry and millions of consumers.’ Justina Miltienyte, of price comparison website Uswitch.com, said over four millions households had seen their energy firm fail in recent weeks. She added: ‘This signals the tipping point of the UK energy crisis.’
Citizens Advice Scotland Fair Markets spokesperson Kate Morrison said: ‘Our advice to consumers is clear – sit tight. The regulator Ofgem and the UK Government have a robust safety net in place.’