Collapse of supplier Bulb could add more than £150 to energy bills

theguardian.com:

Households could end up paying more than £150 extra on their energy bills because of the collapse of Bulb, as the price of bailing out the failed supplier threatens to top £4bn by next spring.

The cost of bailing out the UK company, which has about 1.4 million customers, has escalated because of rising wholesale gas prices since Russia’s invasion of Ukraine.

The Office for Budget Responsibility said in March that the bailout would cost £2.2bn over two years. The consultancy Auxilione forecasts that Bulb could lose a further £420m for the six months to October, when households use less energy, and £1.6bn during the colder winter months.

Bulb is in a special administration overseen by the UK government and run by the restructuring firm Teneo. The government has refused to allow it to hedge – where companies buy energy at a fixed price for a certain period – exposing it to rising gas prices.

Bulb was one of 29 suppliers to have collapsed during the energy crisis, with many caught out by sharp rises in prices combined with a lack of hedging.

The Auxilione director Tony Jordan told the Financial Times the government “was paying a high price for the lack of hedging, and costs could rise even higher if gas prices continue to soar”.

Bulb was considered too large to fail and the government stepped in to handle its administration. However, it has yet to find a buyer, with only Octopus, the UK’s fourth largest supplier, still interested in a deal.

Octopus has offered to take over Bulb’s customers if the government buys gas and electricity in advance at a cost of £1bn, the FT reported. Octopus has also offered terms under which it would share in the profits of Bulb’s customers with the government should they become profitable. The Octopus