Government auction of failed energy firm Bulb gets just one bid

FEARS are growing that the taxpayer bill for bailing out Bulb could balloon further after just one offer was made to buy the failed energy supplier.

The Government has only received a bid from Octopus Energy for Bulb’s assets, an insider confirmed yesterday, after running an auction to try to attract interest. The terms of the offer made by Octopus, the UK’S fifth-biggest energy supplier, are not known.

But the lack of alternatives means that, if ministers reject it, taxpayers will be saddled with further costs to keep Bulb afloat. The arrangement has so far cost more than £2bn.

The lack of alternative bids could also give Octopus more leverage in talks, allowing it to extract better terms. Bulb, which has 1.7m customers, has been in “special administration” since late November, when it ran out of cash in the face of soaring wholesale energy costs.

The business was in effect nationalised, which allowed it to continue trading with no changes for households.

British Gas owner Centrica and Masdar, a renewable energy company owned by Abu Dhabi’s sovereign wealth fund, both looked at buying Bulb but dropped out late in the process, according to the Financial Times.

A decision on whether to accept the Octopus offer is expected to be made in the coming weeks. Further options presented to ministers are said to include breaking up the supplier and parcelling its customers out to other energy firms.

That suggestion was previously rejected by the regulator Ofgem, which told Kwasi Kwarteng, the Business Secretary, that Bulb was too large and conditions in the energy market too volatile to transfer the company’s customers to rivals.

After its collapse, Bulb was criticised for not “hedging” by buying energy in advance. Its administrators at Teneo revealed Bulb had a six-month “rolling hedging policy” that meant it only started buying energy for the fourth quarter of 2022 in May.

As Treasury rules ban governmentrun entities from hedging, taxpayers have also been left paying higher costs after gas prices continued to soar.

A spokesman for the Department for Business, Energy and Industrial Strategy declined to comment.