The High Court has approved the transfer of failed energy supplier Bulb to Octopus Energy following a judicial review earlier this week.
With the judicial trial having been considered earlier this week, the court has now approved the transfer with this set to be completed shortly before midnight on the 20 December 2022, Bulb confirmed.
“The High Court has rightly given the green light for the transfer to go ahead in December. Taxpayers will be saved from millions – even billions – of costs that could have been incurred if the process was dragged out,” said an Octopus Energy spokesperson.
“This is positive news for Bulb’s customers and staff, and starts to bring to an end the huge financial exposures for government and taxpayers.”
The judicial review had been launched following Octopus Energy’s successful bid to integrate Bulb’s services into its own offering which currently consists of 1.5 million customers. This had been achieved following Bulb being put into Special Administration off the back of the wholesale gas crisis which rocked energy suppliers in late 2021.
Speaking on the judicial review earlier this week, a spokesperson for Octopus Energy said: “It’s now clear that other companies had many opportunities to bid, knew they could propose hedging support, and were invited to counter bid against Octopus.
“Instead of doing so, they waited until a deal was announced and then launched expensive legal action which could cost taxpayers millions, even billions. We will continue to work hard to get this resolved as fast as possible, bringing stability for Bulb customers and staff and ending the huge financial exposure for taxpayers.”
The collapse of nearly 30 energy suppliers in late 2021 led to Octopus taking on increased quantities of customers via the Supplier of Last Resort (SoLR) initiative. In July, the energy supplier took on 3,000 customers from the UK Energy Incubator Hub.
The result has seen Octopus become the UK’s fourth largest energy supplier, capping a meteoric rise since the company’s inception in 2015. With the additional customers set to flood in from Bulb, the company is expected to make further growth in the UK market.
The cost of the government bailing out of Bulb currently stands at £6.5 billion, according to the Office of Budget Responsibility (OBR). This figure has been paid via public funding and thus has brought about controversy into the business.
The sale of Bulb to Octopus Energy is to be managed via an Energy Transfer Scheme (ETS). In doing so, relevant assets of Bulb are to be placed into a new, separate entity – dubbed Bulb UK Operations Limited – to protect consumers. This will then be sold to Octopus and will remain ringfenced from the company’s core business for a defined period.
Bulb is currently unhedged and as a result the government will provide financial support to the new entity for the purchase of energy for its customers over the winter period. This will then be repaid by the new entity in accordance with an agreed repayment scheme.
