Britain’s seventh-biggest energy supplier Bulb has today confirmed it has gone into special administration.
Special administration is designed to protect the customers of a large energy supplier that’s become insolvent.
The special administrator is required by the government under the 2011 Energy Act to continue to supply energy to customers and will protect customer credit balances.
Bulb said the process to appoint special administrators is not yet finished and it expects to have an administrator appointed shortly.
In the last few weeks, there were several reports that claimed the company was close to collapse.
In the meantime, Sky News today reported that the government and Ofgem are in talks with Sequoia Economic Infrastructure Income Fund which has an outstanding loan of around £50 million to Bulb’s parent company Simple Energy.
In a blog post, the company said: “When we started exploring fundraising options, we were delighted to receive lots of interest from investors to fund our business plans and future growth.
“However, the rising energy crisis in the UK and around the world has concerned investors who can’t go ahead while wholesale prices are so high and the price cap, designed to protect the customer, currently means suppliers provide energy at a significant loss.
“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. We’ve always been big supporters of the idea of a price cap to protect customers, but the current price cap is set at a level around 70p per therm, well below the cost of energy.”
A Bulb spokesperson told ELN: “We have decided to support Bulb being placed into special administration, which means it will continue to operate with no interruption of service or supply to members.
“If you are a Bulb member, please do not worry as your energy supply is secure and all credit balances are protected.”
An Ofgem spokesperson said: “Customers of Bulb do not need to worry – Bulb will continue to operate as normal.
“Ofgem is working very closely with the government. This includes plans for Ofgem to apply to Court to appoint an administrator who will run the company.
“Customers will see no disruption to their supply and their account and tariff will continue as normal. Bulb staff will still be available to answer calls and queries.”
A government spokesperson said: “We have agreed with Ofgem on the appointment of special administrators for Bulb and are taking this forward in the quickest possible timeframe.
“The Special Administration Regime is a long-standing, well-established mechanism to protect energy consumers and ensure continued energy supply when a supplier fails.
“Bulb customers do not need to do anything, there will be no disruption to supply or current energy prices, and credit balances are protected.
“Our priority remains protecting consumers, which is why the Energy Price Cap will remain in place to ensure millions of customers pay a fair price for their energy this winter.”