Court to examine Bulb-Octopus deal as rivals claim preferential terms

theguardian.com:

Britain’s biggest energy suppliers are set for a courtroom clash over whether the government handed preferential terms to Octopus Energy in allowing it to snap up Bulb from administration.

Octopus acquired Bulb’s 1.5 million customers late last year after the supplier spent a year in a government-handled administration.

Judges will next week hear a judicial review brought by rival suppliers Centrica, which owns British Gas, E.ON and ScottishPower over the decision to agree the deal by the energy secretary, Grant Shapps.

The trio claim there was a lack of transparency around the terms of the deal between Octopus and the Department for Business, Energy and Industrial Strategy.

It is understood they will argue that Octopus received promises of state aid not proffered to competitors in the process.

Octopus is expected to reject this claim and argue that administrators informed it and rivals that government support might be available and bidders needed to request what they would need to take on Bulb’s customers. It has labelled the legal action “desperate”.

Lawyers for Octopus are likely to argue that the fact that it submitted two alternative options for the deal showed that the company did not have insight into what structure of support would be available from government.

As part of the deal, the government offered support to enable Bulb to buy energy over the winter when wholesale gas prices were at high levels, inflated by the war in Ukraine.

The hedging support is expected to amount to about £1.8bn. However, as wholesale prices have fallen sharply in recent months, Octopus could pay back nearly £3bn to the government, equivalent to a £1.2bn profit from the deal.

Octopus will claim this backs up founder Greg Jackson’s claim that