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Bulb Energy enters special administration but will continue to serve 1.7m customers
22 November 2021, 12:37 | Updated: 22 November 2021, 20:48
Britain's seventh-biggest energy supplier has been placed into special administration, but will continue to supply its 1.7 million customers.
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In a statement released this afternoon, Bulb Energy confirmed the company has been placed into special administration amid the supply crisis.
A spokesperson for the company 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."
Special administration is designed to allow customers to continue to operate as usual, meaning tariffs will not change and the price cap applies to all consumer energy tariffs.
Top up customers will also remain unaffected and any customer in the process of switching to or from Bulb, will continue with the switch as normal.
Bulb welcomed Prime Minister Boris Johnson to their new central London office in July, branding themselves as the "fastest-growing company in Europe".
The price of gas has soared in recent weeks, putting several energy suppliers out of business and forcing some factories to stop production.
We’ve made the difficult decision to support Bulb being placed into special administration. https://t.co/8HQTYttOvm. We want to reassure you there will be no change to your energy supply (1/4)— Bulb (@BulbUK) November 22, 2021
Explaining why the company has struggled, Bulb Engery said: "Wholesale prices have skyrocketed and continue to be extremely volatile.
"The gas supply shortage combined with lower exports from Russia and increased demand means they remain high and unpredictable. Prices have hit close to £4.00 per therm recently, compared with 50p per therm a year ago.
"We’ve always been big supporters of the idea of a price cap to protect customers, but the current price cap is set at a level around 70p per therm, well below the cost of energy."
Ed Miliband MP, Labour’s Shadow Business Secretary, said the collapse of energy suppliers is a "direct consequence of a decade of Conservative inaction".
He said we have been left "exposed and vulnerable" as a country and the business secretary has "buried his head in the sand for too long".
"Families hit by a cost of living crisis will be deeply worried about what this collapse means for them, as will the workers at Bulb," said Mr Miliband.
He continued: "Instead of action we’ve had complacency from ministers and they are making the cost of living crisis worse by raising national insurance and refusing to cut VAT on energy bills."
The company's exit from the market comes following the collapse of more than 20 suppliers since the start of the year amid the soaring price of gas.
Bulb becomes the first company to rely on regulator Ofgem's special administration regime.
In the past, failed suppliers have been small enough for their customers to be picked up by one of their rivals.
An administrator will be appointed to run the company until it is either rescued, sold, or has its customers transferred to other suppliers.
Bulb's parent company, Simple Energy, will also enter administration. However, Bulb's international businesses in France, Spain and the US will continue trading.
The company added: "We’re expecting a high volume of calls. Please only call if it’s an emergency, you’re in a vulnerable situation or you're struggling to pay your bills. That way, we can help those who need it most."
Ofgem’s current advice to customers in the meantime is to:
- Not switch to another energy supplier until a new one has been appointed and you have been contacted by them in the following weeks
- Take a meter reading ready for when your new supplier contacts you
This will make the process of transferring customers over to the chosen supplier, and paying back any outstanding credit balances, as smooth as possible.