Government provides up to £4.5bn to fund Bulb takeover by Octopus
The takeover was closed shortly before midnight on Tuesday despite legal challenges by rival energy suppliers.
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Your support makes all the difference.The UK Government will pay up to £4.5 billion to help fund the takeover of collapsed energy firm Bulb by rival supplier Octopus, according to new filings.
It came after the takeover was closed shortly before midnight on Tuesday despite legal challenges by rival energy suppliers.
Documents from the Department for Business, Energy and Industrial Strategy (Beis) stressed the financial support could still be less, depending on energy prices this winter.
Octopus said it has agreed a repayment plan with the Government for the funds.
The Office for Budget Responsibility had previously estimated that the cost to the taxpayer of bailing out Bulb could be around £6.5 billion.
The funds earmarked by the Government in the latest update could help cover costs such as the price of energy until March 2023 and regulatory costs.
Bulb had around 1.6 million customers when it collapsed a year ago – making it simply too big for customers to be transferred to a new supplier by Ofgem as is normally the case.
As a result the Government was forced to step in and run the business under a so-called special administration.
This starts to bring an end to the huge financial exposures for taxpayers and paves the way for a better and more certain future for Bulb's staff and customers
It allowed Bulb to keep trading until officials and administrators could figure out what to do with the households that rely on it to keep their lights on.
New owner Octopus Energy said the transfer took place at 11:58pm on Tuesday evening after approval from the Business Secretary and the High Court.
Rivals to Octopus have claimed that the process was flawed, with British Gas, ScottishPower and E.ON all taking part in a legal challenge.
Greg Jackson, chief executive and founder of Octopus Energy, said: “This starts to bring an end to the huge financial exposures for taxpayers and paves the way for a better and more certain future for Bulb’s staff and customers.
“For now, we’d ask Bulb customers to sit tight – they will still be looked after by the Bulb team.
“We’ll be in touch with customers as and when their account is ready to move to Octopus’ award-winning systems.”