Bristol City Council Cabinet has agreed to sell Bristol Energy after investing more than £36 million into the publicly-owned retailer.
Mayor Marvin Rees blamed a volatile market place and said the company had faced continued challenges since being established by his predecessor.
Last month it emerged that the council-backed retailer, which was established in 2015, had appointed Ernst and Young to conduct an assessment of the business’ future viability.
However yesterday evening (2 June), the cabinet reviewed recommendations during an exempt session and agreed that selling the company now would prevent any further investment.
Rees said: “Establishing an energy company was always a high risk for the council, and one which has brought continued challenges. The energy market is dominated by well-established, far larger energy providers.
“Having inherited a failing company where £15 million had already been spent or earmarked for spend, we were faced with a choice. We could have closed the company then or tried to develop a business strategy that would succeed, both in tackling fuel poverty in Bristol and delivering a financial return for the city. This proved to be impossible in such a volatile market place.
“We have tried to work in the best interests of the city and Bristol Energy customers, but been unable to divulge the challenge we were tackling as this would have further disadvantaged us against competitors.”
Councillor Craig Cheney, deputy mayor and cabinet lead for companies, said: “Selling Bristol Energy is in the best interests for the council and city tax payers. We have worked tirelessly to try and turn the company into something that is not only profitable but also offers more to citizens in terms of social benefit as this was always the vision when we took it on.
“Projects supporting this vision include buying energy directly from over 54 renewable generators, most of them community owned, and the Bristol Energy fuel good fund which supports fuel poverty.”
The publicly-owned retailer made a £12 million loss in 2019 and did not expect to be in the black until 2021.
Last year the supplier reported having more than 104,000 domestic customers and 1,400 business customers, over 4,500 sites.
Last month Utility Week revealed that Nottingham City Council-owned Robin Hood Energy had appointed Deloitte to undertake a strategic review.
You can read Utility Week’s latest analysis on council-backed energy retailers here.