PRESS RELEASE : UK government approves agreement between Bulb and Octopus Energy, providing certainty to 1.5 million customers [October 2022]

The press release issued by the Department for Business, Energy and Industrial Strategy on 29 October 2022.

An agreement was reached overnight between special administrators of Bulb and Octopus Energy, the UK government confirms today, in a move that will protect consumers and taxpayers.

Bulb’s special administrators have been running a competitive and extensive sale process within the market for Bulb in recent months and have now reached a final agreement which will see Bulb’s 1.5 million customers transferred to Octopus Energy.

The sale will be completed following a statutory process called an Energy Transfer Scheme (ETS), which will transfer the relevant assets of Bulb into a new separate entity that will protect consumers during the transfer process. The process is subject to approval by the Business and Energy Secretary and will take effect at a time ordered by the High Court, expected by the end of November.

Bulb customers will not experience any change or disruption to their energy supplies as part of this transfer. There is no change to either Bulb or Octopus customers’ supply arrangements, and credit balances are protected. This means customers do not need to take any action and all direct debits will automatically be transferred.

The government will work closely with Ofgem and Bulb’s special administrators to ensure the exit from special administration and transfer of customers to Octopus achieves the best outcome practicable for Bulb customers, taxpayers, and the industry. Last night’s deal comes alongside ongoing steps that the UK government and independent regulator, Ofgem, are taking to boost the financial resilience of the sector.

Business and Energy Secretary Grant Shapps said:

This government’s overriding priority is to protect consumers and last night’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.

Moving forward, I intend to do everything in my power to ensure our energy system provides secure and affordable energy for all.

Octopus will continue to use Bulb’s technology and brand for a transitionary period so that there is a smooth transfer for Bulb’s customers. In addition, customers will continue to benefit from Ofgem’s supply licence protections, such as ensuring energy suppliers provide advice for vulnerable customers through existing financial support schemes.

Greg Jackson, CEO and founder of Octopus Energy Group, comments:

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.

We started off as rivals but shared the same mission – driving a greener, cheaper energy system with people at the heart. We know how important this is to Bulb’s loyal customers and dedicated staff, and are determined that Octopus can provide them with a stable home for the future.

Matthew Cowlishaw, Senior Managing Director at Teneo and Special Administrator to Bulb Energy Ltd, said:

When the energy administrators were appointed in November 2021, our primary objectives were to enable Bulb to trade as usual while minimising the cost to the taxpayer. Following a thorough and extensive process over the course of almost a year, we examined all options and in conjunction with BEIS came to the conclusion that this transaction would provide the most value to the taxpayer.

We are pleased that we have achieved the objectives of the special administration, especially against the backdrop of wider energy market disruption, and that the transition of employees and customers will provide certainty for both going forward.

The government will provide the remaining funding necessary to ensure that the special administration is wound up in a way that protects customers’ supply. The government can recoup these costs at a later date, ensuring that we get the best outcome for Bulb’s customers and the British taxpayer.

The current increase in wholesale energy prices is driven by a number of factors including Putin’s illegal invasion of Ukraine and weaponisation of energy, as well as the global recovery from the COVID pandemic. Recent volatile global gas prices have emphasised the need to ensure greater energy independence to protect households in the long-term through clean power generated in the country.

The Energy Price Guarantee remains in place and will continue at the same level this winter, saving the typical household around £700 this winter, based on what energy prices would have been under the current price cap – reducing bills by roughly a third. This is on top of the £400 energy bills discount for each household and additional targeted support that continues to be rolled out for the most vulnerable, including £1,200 in direct payments this year.