Failed energy supplier Bulb has confirmed a judicial review has been lodged that may delay the transfer of customers and employees to Octopus Energy.
However, with the launch of a judicial review into the lawfulness of the procedure, this is set to delay the transfer of the company to Octopus and thus could see a setback in the proceedings.
“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,” said a Octopus Energy spokesperson.
“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 sale 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.
Bulb entered special administration as a result of the volatility in the wholesale gas market witnessed towards the end of 2021. Along with Bulb being put into special administration, nearly 30 energy suppliers collapsed between September 2021 and July 2022.
Adding to the wholesale gas crisis was the Russia-Ukraine conflict which saw natural gas imports blocked. Research by EnAppSys in early 2022 found that during Q1 2022, the average EPEX day-ahead price was £200.80/MWh, while the corresponding Nordpool price was £199.63/MWh — over triple the average prices for the same auctions in Q1 2021. Within day price averages also tripled from £59.62/MWh in Q1 2021 to £194.30/MWh.
Speaking on the transfer of Bulb to Octopus Energy, business and energy secretary Grant Shapps said: “This government’s overriding priority is to protect consumers and today’s sale will bring vital reassurance and energy security to consumers across the country at a time when they need it most.
“This is a fresh start and means Bulb’s 1.5 million customers can rest easy, knowing they have a new energy home in Octopus. Moving forward, I intend to do everything in my power to ensure our energy system provides secure and affordable energy for all.”