What happened and how will it affect Bulb customers? The vital questions answered as energy giant goes into administration
What’s happened to Bulb?
The company is selling gas and electricity for less than it costs to buy. This is because the Government’s price cap limits what suppliers can charge to under the current wholesale price of energy.
The firm’s investors and lenders refused to continue supporting these losses, forcing it to shut down.
The cap offers some protection for householders when wholesale prices surge, but it means that energy firms are running up massive losses.
Bulb has 1.7million customers in the UK and has become the biggest gas and electricity firm yet to go into administration
Industry regulator Ofgem would normally appoint a rival energy firm to take on Bulb’s 1.7million customers under a regime known as the Supplier of Last Resort.
이 경우, there is no chance of doing so, at least in the short term, because no other firm is prepared to take on the costs and huge losses involved.
A team of special administrators will run the company and buy and sell energy until another firm in the sector is willing to take on the customers.
How will it affect customers?
There is no risk to the supply of gas and electricity or any loss of credit that households have on their account . Customers will typically have been paying around £900 a year.
Under the new regime, this figure is likely to rise to the official price cap of £1,277. The cap is due to be reviewed next April and is likely to rise by several hundred pounds.
Bulb’s demise marks one of the biggest failures in the ongoing energy crisis – coming weeks after Avro Energy went bust leaving 580,000 customers facing uncertainty (스톡 이미지)
What should they do now?
Consumer group Which? advises customers to do nothing and wait for information from Bulb. There is little point in shopping around for cheaper deals because there is nothing below the official cap and many energy firms are not taking on new customers.
Who will cover the losses in adminstration?
The most likely outcome is the losses will be passed on to all households through a levy on every bill applied over the next few years.