Bulb collapses into 'special administration' – what it means for your gas and electricity
Bulb, which supplies more than 1.7 million households, has collapsed into a so-called 'special administration', becoming the largest firm to fail during the current energy crisis. This process, which hasn't been used before in the energy market, means Bulb will continue to operate as usual for existing customers for now. But it will no longer take on new customers and its future as a company is uncertain.
If you're a Bulb customer, you don't need to do anything and nothing will change for now. We've full info on what it means for you below, plus some thoughts from MoneySavingExpert.com founder Martin Lewis...
The info below only applies to domestic (household) customers. The rules are different if you're a business customer – you'll need to check directly with Bulb what it means for you.
Bulb customer? What to do in a nutshell
We've full details below, but in brief – DO NOTHING. While Bulb has collapsed, it is still your supplier, just under new management, so that means:
- You should keep paying your direct debit and top up your prepay meter as normal.
- Bulb's rates were already at regulator Ofgem's price cap, so you stay on that rate.
- Customer credit is protected, so if it owes you anything, it still owes you.
- Don't switch, as there are no tariffs meaningfully cheaper.
Your supply will continue as normal
While Bulb has collapsed, the special administration process means customers should not notice any changes for now. So your gas and electricity supply will continue, you can use your online account, contact Bulb's customer services, and you'll see Bulb's name on your bills. If you're on prepay, you can also continue to top up as usual.
You'll still pay the price-cap rate – so DON'T switch or you may pay more
Your price won't change for now and Ofgem says the administrator's role will be to ensure energy supplies continue at the lowest cost that it is reasonably practicable to incur.
Bulb only offers one variable tariff for credit meter customers and one for prepay customers, both priced at the maximum allowed under energy regulator Ofgem's price cap. Due to the energy market crisis, with wholesale prices (what providers pay) at record highs, there's nothing cheaper than this right now, so don't be tempted by firms telling you to switch or you may pay 40%+ more – see Martin Lewis: 'Do nothing' with your energy supply MSE News story.
If you were already in the process of switching to or from Bulb, this will proceed as planned.
Don't cancel your direct debit
It's important not to cancel your direct debit payment. Bulb will remain your supplier and will continue to charge you at your current rate for now.
If you do cancel your direct debit, you may end up paying more as the energy price cap is lower for those paying by direct debit compared to other methods of payment.
Take a meter reading and screen grab your latest statement if you can
You can continue to access your account online for now, though Bulb's website might be slow following the news. So when you can, download or take a screen grab of your latest statement and any credit amounts just in case you need these down the line. You may also want to take a meter reading.
Any credit is protected – even if you left Bulb recently
You may be owed money by Bulb if your account had built up credit. But Ofgem says this will be protected under the special administration process. If you're an existing customer, the credit will stay on your account and you can use it to pay for future energy use or request a refund as normal.
If you've left the firm but you're owed credit, Bulb (or the administrator) will still pay this to you.
If you owe Bulb money you'll still need to pay it back
If you're in debt to Bulb you will still have to pay this back. Bulb will contact you to discuss repayment.
'Special administration' is different to what usually happens when an energy supplier goes under
A 'special administration regime (SAR)' is different from the usual process when a supplier goes under. Normally, a 'supplier of last resort (SOLR)' is put in place by energy regulator Ofgem to take on customers of a failed supplier. Since September alone, 21 domestic energy suppliers (excluding Bulb) have gone bust amid record wholesale costs (what energy firms pay).
But Bulb is the biggest energy provider to fail so far, and if a single supplier took on all of its customers, the cost of supplying energy and honouring credit balances would be a big risk.
The special administration regime instead enables Ofgem to appoint an administrator – in this case, a company called Teneo – to run the company until Bulb is either rescued (such as through restructuring), sold, or until it's transferred all of Bulb's customers to other suppliers. The scheme is specifically designed for the failure of large suppliers.
The 'special' means the administrator must consider customers' interests as well as creditors (those Bulb owed money to), and if needed can request Government funding.
Teneo, which was appointed on 25 November, will now takeover the running of Bulb and decide its fate. It will, however, still be subject to the same rules that govern all energy suppliers, so you'll still be protected by the price cap, for example.
Will I still get my warm home discount payment?
According to Ofgem, the obligations under the Warm Home Discount scheme will remain, and it expects the administrators to pay any rebates as planned this winter.
If you usually get the warm home discount as part of the 'core group' (so you don't normally apply for it but are entitled to it), you will still get it automatically from Bulb.
If you usually apply for the warm home discount as part of the 'broader group', your application will still be processed, and you can still apply on its website.
I want to switch from a prepay meter to a credit meter – will Bulb still let me?
Under the special administration regime, things like switching meters should continue as normal – you can contact Bulb directly if you want to change yours. For full info on how to switch meters, see Cheap prepaid gas & electricity.
What does Bulb say?
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."
In a statement on its website, the firm added: "When we started exploring fundraising options, we were delighted to receive lots of interest from investors to fund our business plans and future growth. However, the rising energy crisis in the UK and around the world has concerned investors who can't go ahead while wholesale prices are so high and the price cap – designed to protect customers – currently means suppliers provide energy at a significant loss.
"Wholesale prices have skyrocketed and continue to be extremely volatile. The gas supply shortage combined with lower exports from Russia and increased demand means they remain high and unpredictable. Prices have hit close to £4 per therm recently, compared with 50p per therm a year ago.
"We've always been big supporters of the idea of a price cap to protect customers, but the current price cap is set at a level around 70p per therm, well below the cost of energy."
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