Bulb Energy, the seventh largest energy supplier in the UK, has become the latest supplier to collapse – but its 1.7m customers are being urged not to panic.
Bulb is the first energy supplier to enter “special administration”, where rather than shutting down and an alternative supplier taking on its customers, it will be run by the government through Ofgem.
Bulb is by far the largest supplier to go bust during the present crisis – previously, the biggest was Avro Energy, which served about 580,000 customers.
With Ofgem unable to find “a supplier of last resort” willing to take on so many new customers at once, Bulb has no other option than to go into special administration, under regulations laid out in the 2011 Energy Act. This is the first time this course of action has been taken since these regulations were written into law a decade ago.
A special administrator will be appointed to oversee Bulb’s operations going forward, whose job it is to protect customers’ interests in the short term. Bulb customers are being encouraged to remain calm and do nothing for the time being, as any credit balances will be protected and their bills will remain normal for the time being. This will likely change in April 2022, however, when the new energy price cap is announced. You can read our guide What is the energy price cap? to find out more about how the price cap works.
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “With 1.7m customers, no other company is keen to step in as a supplier of last resort, which means the taxpayer is likely to take the strain, so we might all end up paying a price.
“The level of debt held by the company could mean it is effectively part nationalised for a period, so the taxpayer is getting involved in the currently unrewarding business of energy supply.”
Over four million people have now been directly impacted by the current energy crisis.
Justina Miltienyte, energy policy expert at Uswitch.com, said: “The most important thing for consumers to know is that their energy supply will continue to run as it always has done, and any credit balances will be protected.
“Affected consumers should not cancel their direct debit – you will continue to receive energy and be billed for it, as normal.
“Technically, you can switch suppliers, but it is worth bearing in mind that there are unlikely to be better deals available elsewhere. You’re probably better off staying put and waiting for the dust to settle on the current situation.
“The administrator may decide to close the supplier down in the future, and move customers elsewhere. But customers will be kept informed by Ofgem and the administrators about what will happen next.”
For more information on what to do about the current crisis, read our article The energy bills crisis: what can you do about soaring costs?
Are you a Bulb customer? What do you make of the news that taxpayers may have to bear the brunt of the crisis? You can join the community discussion, or leave a comment below. We’d love to hear your experiences.