Bristol City Council is selling off Bristol Energy following the supplier facing “unprecedented challenges”.
The decision to sell was made in a council meeting on 2 June, with the Cabinet reviewing recommendations made by Ernst & Young.
The accountancy firm had been appointed to advise the council on the business viability of the supplier in May, when it was first reported that a sale may have been on the cards.
This has now been confirmed, with the Cabinet agreeing that selling the company would prevent any further investment than already agreed.
As of 2 June, the council’s cash investment in Bristol Energy totaled £36.5 million, with the total cash funding envelope set at £37.7 million.
The council is now on the hunt for a buyer for the supplier, which Mayor of Bristol Marvin Rees said has faced “unprecedented challenges” since being established in 2015 by the previous Mayor.
It was a similar story for Portsmouth City Council's Victory Energy, intended to mirror Bristol Energy and Nottingham's Robin Hood Energy, which was put up for sale before eventually being closed for good after the council failed to find a buyer.
Rees said that Bristol City Council was faced with a choice when it “inherited a failing company” that had already seen £15 million earmarked for spending.
“We could have closed the company then or tried to develop a business strategy that would succeed, both in tackling fuel poverty in Bristol and delivering a financial return for the city. This proved to be impossible in such a volatile market place,” he continued.
It is a turbulent time for small suppliers, with ten energy suppliers going bust in the 2018/19 financial year.
Fellow council-owned supplier Robin Hood Energy has also run into financial trouble, posting a loss of £23.1 million in its latest financial results.
Bristol Energy, however, has made a number of new announcements in recent months, such as the of three green energy tariffs in January that saw the supplier go 100% renewable.
The company also teamed up with software company Eliq for the development of an AI-enabled energy monitoring app last year, securing government funding for the project and is also involved in the Bristol City Leap project, which is aiming to transform the city into being net zero by 2030.