Bulb Energy news – Firm collapses into administration as 1.7m customers urged not to panic about supplies

Explained: Should I switch supplier?

Not yet. Your supply with Bulb will continue as normal, and you’re unlikely to find any better tariff out there right now.

Standard variable prices are capped and fixed tariff deals are generally higher than this at the moment, so switching is unlikely to get you a cheaper bill.

Miltienyte said: “Technically, you can switch suppliers, but it is worth bearing in mind that there are unlikely to be better deals available elsewhere.

“You’re probably better off staying put and waiting for the dust to settle on the current situation.”  

Who will my new supplier be after Bulb?

Normally Ofgem will move customers of failed firms to a new supplier but as Bulb is in special administration, Bulb will continue to supply customers for now

Bulb could still be rescued by another company that could takeover customer’s accounts.

Miltienyte said: “The administrator may decide to close the supplier down in the future, and move customers elsewhere.

“But customers will be kept informed by Ofgem and the administrators about what will happen next.”

What happens to my Bulb credit?

Any credit you have with Bulb is protected when you are moved by Ofgem to another supplier.

This should be protected under Bulb’s special administration too.

Justina Miltienyte from USwitch said: “The most important thing for consumers to know is that their energy supply will continue to run as it always has done, and any credit balances will be protected.”

An estimated 21million households pay energy bills by direct debit, paying the same amount each month based on estimated use over the entire year.

But actual use can vary through the seasons, as more energy is generally used in winter when the heating is on and less in summer when the weather is warmer.

During the summer months customers can often end up paying more than the energy they use, leaving them with a credit balance with their energy company.

What should you go if your energy supplier goes bust? (Continued…)

Experts like Martin Lewis’ MoneySavingExpert are advising customers not to rush to switch though, and instead “simply sit tight and wait to be contacted by a new supplier”.

But it is recommended that you take a meter reading ready for when your new supplier contacts you.

Other charities also recommend keeping old energy bills and waiting until your new supplier is appointed before cancelling any direct debits.

What should you go if your energy supplier goes bust?

If your supplier folds, your energy won’t be cut off, so there’s no need to panic.

Ofgem will arrange an interim supplier so you won’t have to go without.

Customers affected will be contacted by the new supplier, which will be chosen by Ofgem. 

With the recent fall of People’s Energy, for example, Ofgem has appointed British Gas to take on supplying the provider’s 350,000 customers.

The new firm won’t have to honour the deal you were on with your previous provider but any credit on your account will be protected.

Bills to rise from Friday

Households will see their bills rise from £1,138 to £1,277 from Friday, when Ofgem raises the price cap – which limits how much households on default tariffs pay for their gas and electricity.

A Bulb spokesperson said: “We’ve decided to support Bulb being placed into special administration, which means it will continue to operate with no interruption of service or supply to members.

“If you’re a Bulb member, please don’t worry as your energy supply is secure and all credit balances are protected.”

Other providers have gone bust since the summer

At least 12 providers have gone bust since the summer, with Utility Point and People’s Energy the first of the list of small providers to go.

It comes as customers who see their supplier go bust this winter could face paying £400 more to new suppliers taking over their contracts.

1,000’s jobs could be lost

According to Sky News, 1,000 jobs could be at risk with the collapse of Bulb.

Providers have been struggling to cope with soaring wholesale energy prices.

Where was the money pumped from?

It comes as Bulb investors are no longer willing to pump more money into the firm, with debts now thought to be more than £600million.

Regulators were on standby for the imminent collapse of the company as early as last month.

A rescue deal was in the works to save the company, but The Sun reported that hopes to pull the company back from the brink were fading.

One company which was considering a takeover of Bulb reportedly claimed the firm has liabilities of around £600m, which made a “solvent takeover of the company hard to envisage”.

Bulb seventh largest energy firm

Bulb is the seventh largest energy firm – providing energy to one in 17 homes – but households will not be left without power while a replacement supplier is found.

It is the biggest provider by far to go under, with several other smaller firms struggling amid rising wholesale energy costs.

Since Bulb is so big, the regulator Ofgem cannot simply get another supplier to take on the customers, as it has done with the 22 other firms who have gone bust since August.