The collapse of Bulb Energy (Bulb) into special administration could cost taxpayers £3bn after Russia’s invasion of Ukraine sent wholesale gas prices rocketing to unprecedented highs.
Sky News has reported that industry executives and government officials now expect Teneo Restructuring – Bulb’s special administrator – to request hundreds of millions of pounds of additional funding within days to keep buying gas to meet customer needs.
Despite its downfall, Bulb remains the seventh biggest energy supplier in the UK with 1.7m customers.
After falling into insolvency in November, the Treasury agreed to provide £1.7bn to enable the company to maintain operations.
This number was confirmed by the Department for Business, Energy and Industrial Strategy to City A.M. last month, following an FOI request.
The potential costs involved in handling Bulb through its period of de-facto nationalisation however have soared since then.
This is partly because the government decided administrators could not hedge purchases of wholesale gas.
Investment bank Lazard has been lined up to find a buyer for Bulb – but has so far been unsuccessful.
The increased support from public funds, combined with fears the price cap could rise to £3,000 per year in October, are only going to make it more difficult for the government to offload the energy firm.