Bulb Energy Limited - Case Update

The Public Accounts Committee (PAC) has published a report warning of uncertainties around the recovery of billions in taxpayer funds already committed to funding Bulb, with concerns that extra costs could still be added to customers’ bills.

According to the report, the decision by Ofgem and the Department for Energy Security and Net Zero to place Bulb into a special administration regime process was necessary to protect its 1.5 million customers. However, this process has reached a cost of £3.02 billion to the taxpayer, and the government must carefully manage the risks of recovering this money in the next couple of years if it hopes to recover most of the money it has invested.

It is estimated that the Department will recover £2.96 billion of the taxpayer funding for the administration from Octopus Energy Group (which acquired Bulb), leaving an estimated shortfall of approximately £246 million to be covered by energy customers. This is in addition to the estimated £2.7 billion already incurred for the 28 energy suppliers which failed before Bulb and were rescued as part of the “supplier of last resort” process. The PAC is concerned that this will add extra costs to customers at a time when many are already struggling to pay their energy bills. Energy customers would also be left on the hook if Octopus defaults on its commitment.

Ultimately, the long-term value for money of the government’s intervention for Bulb will only be known after the special administration is completed and the temporary taxpayer funding is recovered. This is not expected to happen until 2024 or 2025.

The report can be accessed HERE.