what you need to know – Which? News

Energy provider Bulb was put into special administration earlier today (22 November). It’s the biggest energy supplier to run into difficulty this autumn, so many customers will be affected. However, if you get your gas or electricity from Bulb you will will see no immediate changes.

Special administration is designed to protect the customers of a large company that has become insolvent. The administrator is required by the Government under the 2011 Energy Act to continue to supply energy to customers and protect credit balances.

Bulb said: ‘We’ve made the difficult decision to support Bulb being placed into special administration. This process is designed to protect Bulb members, ensuring there’s no change to your supply and your credit balance is protected.’

Previously Bulb has claimed to be the fastest-growing company in Europe, and that it was paving the way in helping people lower their energy bills and carbon emissions.

Keep reading for what Bulb customers need to know now.

You may also be interested in: our ranking of the best and worst energy companies according to their customers

Bulb customers: what happens next

Woman sitting at a table with her head in her hands holding an energy bill

  • If you are a Bulb customer your gas and electricity supply will continue as usual. You won’t lose any credit that you had built up with Bulb. Your tariff won’t change either and prepayment meter top-ups will work as normal.
  • If you’re switching to or from Bulb, this will continue as usual.
  • If you’re expecting a Bulb smart meter installation or other meter appointments, these will also continue go ahead.

A special administrator will be appointed to run Bulb. The process of choosing one is set to finish ‘shortly’.

It can take up to 14 days to appoint a special administrator. This is because the energy regulator Ofgem has to get approval from a court with the permission of the Secretary of State.

Once chosen, the administrator will run Bulb for the short term, until it is either:

  • rescued (e.g. through restructuring it)
  • sold
  • customers are transferred to other suppliers.

This is the first time the special adminsitration process has been used in the energy market. Smaller failed firms’ customers have previously been transferred to another energy company instead.

If you are a Bulb customer, you are free to switch to another energy supplier while the administrator is running Bulb if you wish.

Read more: latest updates on 2021’s failing energy companies

Will I have to pay more for energy with an administrator running Bulb?

Hand using a calculator to work out an energy bill

No. Bulb has confirmed that customers’ tariffs are not changing and the price cap still applies.

Bulb has one variable tariff so all its customers are on the same rates. Bulb said it offered a ‘fair price…we think of it as great value for money’.

It raised prices in April, June and October 2021. Its prices are currently in line with the price cap.

The price cap changes every six months. Since wholesale prices are high, it’s likely that the cap will increase in April.

Read more: Energy price rises and supplier failures: your questions answered

Why is Bulb Energy in difficulty?

Electricity pylons in a sunset

There were rumours for several weeks that Bulb was looking for a rescue deal and reports that it was in discussions with other energy companies about a buyout.

Bulb said that lots of investors were initially interested in funding its business plans and future growth.

In a statement delivered this morning it said that: ‘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 […] currently means suppliers provide energy at a significant loss.’

As the seventh-largest UK energy supplier, the cost of rescuing Bulb is likely to be very high. With an estimated 1.7 million customers, It is more than double the size of the next-biggest energy firm to fail this year (Avro Energy).

Many of Bulb’s customers will be keen to make sure they continue to use green energy. Find out how to use greener energy at home without switching supplier, or head to our newly ranked Eco Providers for energy.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *