Bulb Energy to go into administration
Bulb Energy has announced that the firm will be put into administration. The company, which is the seventh-largest energy company in the UK with 1.7 million customers, is the largest UK energy company to face difficulties following a sharp rise in wholesale gas prices this year.
Bulb will become the first energy company to be placed under the government’s Special Administrator Regime (SAR), which is for when an energy company goes bust but is too big to have its customers transferred to another firm. Whilst under the regime, the firm will be run by the government through the regulator Ofgem.
Customers have been advised not to take any action and they will be contacted when any steps are needed.
The company cut their operating losses almost in half from 2019-2020 (from £129 million in 2019 to £63 million in 2020), so appeared to be on the right track towards a profitable business model.
The news that the company has gone into administration will come as an even bigger shock considering Bulb Energy has also previously been valued as a ‘unicorn’ company and was declared the fastest-growing energy company in the world in 2019. A ‘unicorn’ is a privately-held startup with a valuation of more than £1bn.
What should Bulb Energy customers do?
In their official response to the news that Bulb had gone into administration, the government have said Bulb customers will not experience any change or disruption to their energy supplies as the appointment of energy administrators will see Bulb continue trading and fulfilling the terms of its supply licence. Bulb customers, including those with prepayment meters, do not need to do anything and customers’ existing credit balances are protected.
They also said Bulb customers will not see any immediate increase to their energy bills while the company is under the administrators, and do not need to look for a new energy supplier, although they are free to do so if they wish.
Finally, the Government said energy supplies across the country remain secure and that they will work closely with Ofgem and the Energy Administrators to ensure the exit from the SAR achieves the best outcome practicable for Bulb customers, taxpayers, and the industry.
Energy Minister Greg Hands also commented: “Our overriding priority is to protect consumers and the appointment of administrators will ensure the supply of energy remains normal to Bulb customers across the country, providing vital reassurance while an enduring solution is agreed.
“The administrators will now take temporary charge of operating Bulb, and that includes ensuring if a new owner cannot be found customers are safely moved to another supplier.”
However, Nick Drewe, money-saving expert at online discounts platform, WeThrift, believes it might be worth Bulb customers changing their suppliers now in case the energy giant collapses.
Nick comments: “Around two million households have seen their energy provider succumb to soaring wholesale prices since the start of September. Therefore, it is important that people are doing all they can to save their pennies.
“For customers who are currently with Bulb, it may be worth looking into switching providers now, before the company does potentially collapse. This will help avoid any financial hassle, particularly with the Christmas period coming up.
“There are simple ways people can save on their energy bills, and one of the most important things to do when switching is researching into a supplier, particularly during these financially difficult times in the UK.
“Opt for a company who is reassuring they are and will remain financially stable, which at the moment include companies such as Octopus Energy, Ovo Energy, Shell Energy Retail and Centrica.
“Make sure you really delve into the different energy suppliers available and compare their prices, choosing the best one for you.”