Scottish Power has slammed the Government’s handling of the sale of Bulb Energy (Bulb), accusing them of distorting competition in the energy sector.
The energy firm’s boss Keith Anderson wrote to Business Secretary Jacob-Rees Mogg calling for the auction of Bulb to be scrapped and restarted, according to Sky News.
In his letter, Anderson told Rees-Mogg the proposed deal with Octopus Energy (Octopus) could “distort competition” and was “not in public interest.”
Octopus has been closing in on a deal for Bulb, with the Government receptive to the terms of the proposed takeover.
City A.M. understands this includes a lump sum of £100m-plus alongside a profit share deal, in return for £1bn in public funds for hedging support which would be paid back over time.
Anderson believed this financing was “unfair” as “no other supplier in the UK has access to such government funding.”
He said: “In the current circumstances we believe other suppliers would be willing to acquire Bulb for a materially smaller level of government support.”
The Scottish Power boss warned any funding provided to Octopus Energy would place it “at a commercial advantage compared with other UK energy suppliers”.
“This in turn is likely to distort competition in the market for energy supply,” he concluded.
Octopus and Ovo lock horns over Bulb
Bulb’s sale process took a dramatic turn with Ovo Energy (Ovo) last week making an eleventh hour swoop for the de-facto nationalised supplier.
Its proposed deal does not include hedging support.
Anderson did not reveal Scottish Power would be interested in acquiring Bulb’s 1.6m customer base in its entirety.
However, if administrators divvied up customers from Bulb and offloading them to multiple suppliers, Sky News reported Scottish Power would consider making a play for some of them.
He also argued that “procedural unfairness” in the Bulb auction, saying the original deadline for bids had been set prior to the Government’s decision to intervene in the market with support for households and packages.
The Government refused to comment on the acquisition process, but confirmed any deal would be in the interests of energy billpayers.
So far, Bulb’s 11-month stint in administration has cost £4bn – making it the biggest bailout since RBS in 2008.
A Government spokesperson said: “The special administrators of Bulb are required by law to keep costs as low as possible. We continue to engage closely with them to ensure maximum value for money for taxpayers.”
Scottish Power has also been approached for comment.