Fears grow that energy firm Bulb could collapse next week as government accelerates contingency plans
The government is accelerating contingency plans for the collapse of Bulb, Britain’s seventh-biggest domestic energy supplier – a demise that would mark by far the biggest insolvency of the crisis engulfing the sector.
Sky News has learnt that ministers and officials, along with the industry regulator Ofgem, believe that Bulb – which has around 1.7 million household customers – could collapse as soon as next week, amid diminishing expectations of a rescue deal.
Industry sources said on Friday that talks with a small number of potential buyers were ongoing, but that others had pulled out in recent days.
A solvent rescue remains a possibility, they said, but added that it was highly unlikely that Bulb could survive through November without new funding.
Ovo Energy, Octopus Energy, and Shell Energy Retail are among the rival gas and electricity groups which have had access to Bulb’s financial data in recent weeks.
An executive at one of the companies which had explored a takeover of Bulb said it had liabilities of approximately £600m, making a solvent takeover of the company hard to envisage given the backdrop of wholesale price volatility.
A Bulb spokesperson said on Friday: “Our discussions with multiple parties to secure additional funding continue to make good progress and we’re encouraged by the drop in wholesale energy prices.
“We expect the government to monitor wholesale prices and their effect on the whole industry, but ministers and Ofgem have been clear we must emerge from the energy crisis with a competitive and innovative market, rather than a return to the oligopoly of the past.”
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Lazard, the investment bank, has been engaged in the search for new funding, while AlixPartners, an advisory firm, has been working with Bulb on short-term measures to strengthen its balance sheet.
If Bulb does collapse, it would place at risk the jobs of roughly 1000 people who work for the company, which was launched in 2015 by Amit Gudka and Hayden Wood, and has accumulated a 6% share of the market.
It supplies 100% renewable electricity and 100% carbon-neutral gas, which would make its failure around the time of the crucial COP26 climate summit in Glasgow a more acute headache for the government.
Its demise would also render the shareholdings of executives and their venture capital backers largely worthless.
The latest developments in Bulb’s rescue efforts pave the way for the inaugural use of a resolution process called the Special Administration Regime (SAR), which would guarantee funding for Bulb from the Treasury while administrators seek a restructuring deal, buyer, or transfer of the customer base.
The demise of Bulb would come close to matching the size of the total customer bases of the 14 energy companies which have ceased trading since the beginning of August.
The largest of those, Avro Energy, had about 580,000 customers.
If the search for a buyer does prove unsuccessful, the Department for Business, Energy and Industrial Strategy, alongside Ofgem, would initially consider whether Bulb can be dealt with through the watchdog’s Supplier of Last Resort (SOLR) process.
Under that, a company’s operating licence is removed and bids are sought from other industry players for its customer base, with losses incurred by the acquirers of those customers are then recouped through an industry levy.
Bulb is, however, regarded by most observers as too large for any single supplier to take on through the SOLR system, meaning that invoking the SAR is now viewed as probable by industry executives.
Under the SAR, the administrator has a legal duty to consider the interest of customers, unlike a conventional insolvency process where the primary duty is to creditors.
Sky News revealed last month that Ofgem had lined up Teneo Restructuring, an advisory firm, to be on standby for the collapse of a large energy company.
In a statement on its website about SAR, Ofgem said a memorandum of understanding had been drawn up between itself, the Treasury, and BEIS, adding: “Provisions for this administration scheme for energy suppliers were included in the 2011 Energy Act.
“It has never been used before because a large energy supplier has never been insolvent.”
A government spokesman said on Friday: “Ofgem – as the expert regulator – is monitoring the situation across the energy market for the continued impacts on high worldwide wholesale gas prices.
“We have put in place the powers and robust processes to ensure customers do not experience any disruption to their energy supply and that costs are minimised if a supplier should exit the market.”
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Energy supplier crisis must never happen again – British Gas boss
The regulator added: “There has been an unprecedented increase in global gas prices which is putting financial pressure on suppliers.
“We know this is a worrying time for many people and our number one priority is protecting customers.
“In the event a supplier fails, Ofgem and government have robust processes in place to ensure customers’ electricity and gas supply continue and domestic customers’ credit balances are protected.”
Many of Bulb’s customers could face higher bills because wholesale prices have soared in recent months, although they have begun to fall again.
In total, around 2 million households have seen their supplier cease trading since the summer, sparking demands from some executives for a removal of the industry price cap or a bailout fund to help with the rescue of smaller suppliers.
Kwasi Kwarteng, the business secretary, has rejected both demands.
On Friday, Ofgem said it would consult on changes to the price cap because the ongoing industry crisis had “changed the perception of risk and uncertainty in this market”.
The collapse of one of the biggest challengers to the big players – the largest of which are Centrica’s British Gas, E.ON Next, EDF Energy, Scottish Power and Ovo Energy, which acquired SSE’s retail business – would be a blow to hopes of a more varied and competitive market.
Octopus Energy, which like Bulb supplies 100% renewable energy, has established itself as an independent, well-funded challenger and now boasts 2.5 million customers across more than 4 million accounts.
A judo Olympian has said her family is “devastated” after the discovery of body in the search for her missing brother.
Lubjana Piovesana, 28, appealed for help to find her younger sibling, Luis, 26, on Saturday. He had not been seen since the early hours of Friday morning.
A body was found in the River Frome near Napier Road in Eastville, Bristol, at around 6pm today, Avon and Somerset Police said.
Formal identification is yet to take place, the force added.
In a post on Instagram, Ms Piovesana wrote: “Hello everyone, Luis has been found.
“We are completely devastated but he has passed away.
“I am grateful for everyone’s support. And I am so sorry this happened.
“Luis was my little brother and loved by everyone. I wish he could have seen the love from everyone. He will be remembered by us all.”
The post was signed off with a dove emoji.
Luis Piovesana did not have any money or his mobile phone with him when he went missing, police said. Pics: Avon & Somerset Police
Mr Piovesana was last seen at around 3am on Friday at the Eastgate retail park, which is less than a 10-minute walk away from where the body was found.
He had travelled there by taxi from a venue in Little Ann Street, St Jude’s, a 10-minute drive away.
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The 26-year-old’s family spent the weekend searching for him, and asked people to check their sheds and gardens.
His partner, Laurin Bohler, said loved ones had travelled from Birmingham to help.
Mounted officers and police drones were also involved in the investigation.
Ms Piovesana competed for Team GB before switching to the Austrian team, and defeated British competitor Lucy Renshall in the women’s -63kg judo event at the Paris Olympics last year.
A man has been jailed for life for murdering his son’s girlfriend after she returned home from the school run.
Officers from Dyfed-Powys Police were called to an address on Bigyn Road in Llanelli, Carmarthenshire, on 5 July last year.
Sophie Evans, 30, had sustained 72 separate injuries on the outside of the body, “all but three of them new injuries”.
Richard Jones, who is now 50, believed he was “being taken advantage of financially” by Ms Evans and his son, with whom she was in a relationship.
While the purpose of Jones’s visit was “purely normal”, he confronted her on that morning about his suspicions and Ms Evans’s reaction was such that Jones “lost [his] temper”.
He subjected Ms Evans to “gross violence” before ultimately strangling her and leaving the property to run errands, including ordering a new bank card and buying pastries from a bakery.
Richard Jones. Pic: Dyfed-Powys Police
‘Last time on their school run’
During sentencing on Monday, the defendant kept his head bowed for most of the hearing.
He will have to serve at least 20 years behind bars before he can be considered for release by the parole board.
Swansea Crown Court heard Ms Evans was the mother of two young children.
Passing his sentence, Judge Geraint Walters said Ms Evans “had just taken her two children for the last time on their school run” prior to the attack.
“She wasn’t to know that when she parted company with them that morning,” he added.
The court heard the Jones believed he was being defrauded by Ms Evans and his son.
“There is clear evidence, that in the days leading up to this, that you had begun harbouring thoughts that Sophie Evans and your own son were in fact financially scamming you,” he said.
“What precisely brought about that view is difficult to determine.”
Judge Walters said Jones “lost [his] temper when [he] didn’t get the answer that [he] thought [he] deserved”.
He added that, having lost his temper, the defendant “subjected [Ms Evans] to gross violence over a period of time, before you ultimately extinguished her life by strangulation”.
The court was told in evidence that at the time of the attack, Ms Evans was wearing only a bath towel.
‘The rock of our family’
In a victim personal statement, Ms Evans’s sister Kerry Quinlan told the court she was “the rock of our family”.
She said Ms Evans was taken from them in a “senseless and cruel act”.
“Words cannot express fully how much of a loss this has been to her children,” she added.
“When they cry themselves to sleep wanting their mum, she isn’t there and never will be.”
Ms Quinlan added that Jones had “taken everything from us, all in the most despicable way possible”.
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Ms Evans’s partner at the time, and the defendant’s son, Jamie Davies, said in a victim personal statement, read on his behalf, that they had both “trusted” Jones, and that Ms Evans had even been planning the defendant’s 50th birthday.
“The thought of having to live my life without Sophie causes me extreme pain and heartache,” he added.
Prosecuting, Michael Jones KC said the offence was aggravated by the defendant’s previous convictions and the fact Ms Evans was murdered in her home.
In mitigation, David Elias KC said there was a “lack of premeditation”.
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