Government could spend £4.5bn on Octopus to fund Bulb takeover
The government has pledged £4.5bn in taxpayer money to finance the takeover of Bulb by its rival energy firm Octopus.
Bulb, which collapsed in 2021 after years of running at a financial loss, spent its last year in a government-run administration.
Energy tech startup Octopus agreed to take over the more than one million Bulb customers in October, despite protests from rival energy companies.
After a period of uncertainty, it was agreed that Octopus Energy would take over Bulb’s customers, however, the Department for Business, Energy, and Industrial Strategy has said funding the handling of the operations under Octopus could cost £4.5bn.
The government agreed to provide financial support to establish “a new and separate entity, owned by Octopus Energy, which will serve Bulb customers until the transfer process has completed and those customers have been fully transferred to Octopus”.
BEIS agreed to provide this funding “to meet the cost of purchasing wholesale energy for the transferring Bulb customers” and will do so until March next year.
The deal could still be called off, however, as energy companies British Gas, Scottish Power, and Eon have jointly protested the takeover and have called for a judicial review. The case is expected to enter High Court next year.
Bulb customers have been assured by the government there will be no disruption to their energy service during the changeover.