Octopus Energy has now completed the acquisition of Bulb Energy, as of 23:58 on 20 December 2022.
This follows the High Court approving the transfer on 1 December, following a Judicial Review being launched into the acquisition at the end of November.
Octopus will now take on Bulb’s 1.5 million customers – making it the third largest supplier in the country – although for the time being customers will remain on the same systems and be managed by Bulb’s team whilst the transfer takes place. Bulb’s 650 staff members will also be automatically transferred over during the process.
The acquisition is being implemented via a process known as the Energy Transfer Scheme (ETS), which will save taxpayers millions of pounds by moving the collapsed supplier back into private ownership, said Octopus.
This will mean that the government is no longer directly exposed to volatility in the wholesale energy market. This will be particularly welcomed following the record high prices seen in the Balancing and Day Ahead market this month.
Until Octopus is able to fully restore hedging for Bulb’s customers energy, the government is set to provide financial support to help cover them over the course of winter 2022. This financial support will then be repaid by the new entity formed through the ETS in accordance with an agreed repayment plan schedule.
Taxpayers will benefit from a profit share agreement for up to four years as part of the ETS deal, Octopus noted, which will see a share of the profits the ringfenced business makes during this time paid to them.
“This starts to bring an end to the huge financial exposures for taxpayers and paves the way for a better and more certain future for Bulb’s staff and customers,” said Greg Jackson, CEO and founder of Octopus Energy.
“For now, we’d ask Bulb customers to sit tight – they will still be looked after by the Bulb team. We’ll be in touch with customers as and when their account is ready to move to Octopus’ award-winning systems.”
The ETS was initially approved by the business and energy secretary on 7 November, and was expected to take place at 23:59 15 November 2022 but was held up due to the Judicial Review. Court dates for the review have been set for next year.
Bulb entered special administration in November 2021, after failing to find new funding opportunities and announcing insolvency amid high power prices. Consultancy Teneo was appointed as administrator by the government, and has since been running the company while a new owner was found.
According to reports in October, such as those in the Telegraph, the support of Bulb over the last year along with this deal could cost households £4 billion. This makes it the most expensive bailout since that of RBS in 2008.
It was the biggest supplier to collapse amid a slew of them at the end of 2021, as high wholesale prices and the Default Tariff Price Cap squeezed suppliers. This led to 29 suppliers shuttering since September 2021, with most being placed into the Supplier of Last Resort (SoLR) Mechanism.
Octopus took on customers from a number of other failed suppliers including over 580,000 customers from Avro Energy, which were migrated over using the company’s propriety Kraken platform.
Octopus currently has 3.4 million domestic energy customers, under the brands Octopus Energy, M&S Energy, Affect Energy, Ebico, London Power and Co-op Energy.