Bulb Energy – the UK’s seventh largest energy firm – has gone into administration. With 1.7 million customers, a lot of people are affected and may be worried about what this means for their energy supply.
If you’re a Bulb customer, don’t panic. This article covers everything you need to know. Read on to find out what Bulb going into administration means for you.
What does Bulb going into administration mean?
Bulb is one of the largest energy companies in the world. There have been rumours the firm might collapse for weeks, and it’s now been confirmed that Bulb will go into ‘special administration’.
This means the government will run the company via the regulator Ofgem for the time being.
The size of the company and the level of debt it holds could mean it is effectively part-nationalised for a period of time. This means the taxpayer will essentially get involved in the currently unrewarding business of energy supply.
In recent months, many other smaller energy firms have gone bust. Customers of these companies were simply moved to different providers as a ‘supplier of last resort’. However, because Bulb has 1.7 million customers, this approach is not an option.
So, Ofgem opted for the special administration measure, which is laid out in the 2011 Energy Act. The regulator said it was planning to apply to a court to appoint an administrator who will run the company.
The full details are currently sparse, but the special administration process will differ from a standard insolvency because the administrator has a duty to consider the interests of customers and continue to supply energy at the lowest possible cost.
Will Bulb customers have their lights turned off?
No, your lights will stay on. Your energy supply will continue as normal. This means there is no need to panic.
Both Ofgem and Bulb have confirmed that there will be no disruption to customers’ supply in this period.
You can keep using energy as normal and will not be charged above the energy price cap. Given the current problems in the energy market, it’s very difficult to find deals much cheaper than this, so it’s unlikely your bills will increase significantly at this stage.
If you are concerned as a result of the announcements, Bulb staff are still available to take your calls and answer any queries you have.
What if your Bulb account is in credit?
Again, there is no need to worry. All credit balances remain protected, according to a statement by the company.
This means you won’t lose out on any of the money you have in credit. If your balance is in credit, you will still be entitled to this money and therefore will be able to use it to pay future bills.
What should you do now?
You don’t have to do anything right away.
Many personal finance experts, including Martin Lewis of Money Saving Expert, are warning against rushing to switch providers as you risk paying over 30% more if you switch now.
Despite this, Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, noted that according to Ofgem, you should be free to switch to another supplier if you choose and your credit balance will be protected.
“It’s unclear whether your current tariff will be honoured or whether you will end up being moved onto one linked to the energy price cap,” she warned.
Either way, as wholesale gas prices keep rising, it’s becoming harder for energy companies to make money – or even survive – under the current price cap. This means there may be a significant increase in energy bills when Ofgem reviews the energy price cap next year.
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