On Saturday, Octopus announced it is taking on Bulb’s 1.5 million customers, “bringing an end to taxpayer losses and uncertainty for Bulb customers and employees”, after the firm was placed into special administration in November 2021.
The Department for Business, Energy & Industrial Strategy (BEIS) confirmed an agreement had been reached between special administrators of Bulb and Octopus, saying the deal will “protect consumers and taxpayers” and “provides a stable new home for Bulb’s customers and 650 employees”. Octopus said it is paying the Government “above market value” to take on Bulb’s customers.
BEIS said the sale will be completed after a statutory process called an energy transfer scheme, which will move Bulb’s relevant assets into a new separate entity that will “protect consumers during the transfer process”. This is subject to approval by new Business and Energy Secretary Grant Shapps and will take effect at a time ordered by the High Court, expected by the end of November.
The Government will provide financial support to the new entity to purchase energy for Bulb customers over the winter but these costs will later be repaid, Octopus said. A profit-share agreement will be put in place for the ringfenced business until agreed funding is repaid by Octopus.
This means payments to shareholders or the wider Octopus Energy Group from the ringfenced entity would be restricted until the Government is repaid, Octopus said.
Bulb customers will not experience any disruption to their energy supplies as part of the transfer, BEIS said. It added there is no change to either firm’s customers’ supply arrangements, and credit balances are protected.
Mr Shapps said: “This Government’s overriding priority is to protect consumers and today’s sale will bring vital reassurance and energy security to consumers across the country at a time when they need it most. This is a fresh start and means Bulb’s 1.5 million customers can rest easy, knowing they have a new energy home in Octopus.”
Octopus will continue to use Bulb’s technology and brand for a transition period so there is a smooth transfer for customers. Customers will also continue to benefit from Ofgem’s supply licence protections, such as ensuring energy suppliers provide advice for vulnerable customers through existing financial support schemes, BEIS said.
Greg Jackson, chief executive and founder of Octopus Energy Group, said: “We take our responsibilities very seriously. We will work unbelievably hard to deliver value for taxpayers and to look after Bulb’s staff and customers.”
Matthew Cowlishaw, senior managing director at Teneo and special administrator to Bulb Energy, said the “transaction would provide the most value to the taxpayer”.
Shadow energy minister Alan Whitehead said: “This is a further reminder of this Conservative Government’s abject failure when it comes to regulation of energy. And the British people are once again paying the price. The Government needs to come clean about how much the collapse of Bulb has cost people in higher bills; what this sale will add to that tally; and how they have concluded that this deal represents value for taxpayer’s money.”