The government has made a “mess” of the energy retail market and must now “live with it” after Bulb become the first supplier to enter the special administration regime, an industry boss has stated.
Under the regime, Ofgem, with permission from the secretary of state, will apply to the courts to appoint an administrator for a large supplier which has become insolvent.
During this period the government, if necessary, will provide funding to ensure that the administration is managed in a way that protects customers’ supply. These costs can then be recouped at a later date.
Speaking to Utility Week, Ecotricity chief executive Dale Vince said: “It is ironic and I am really glad that the government are now in the energy market because they made this mess and now they have to live with it.
“While it was all very well them being hard faced towards energy companies from the side-lines about the price cap and the guaranteed loss making, now they are having to endure that themselves and I think that is a very good thing. Reality will help them understand quite what it is they are doing, maybe.”
When whether other suppliers would be interested in taking on Bulb’s customers, Vince responded: “Is there an appetite out there from anybody to have 1.7 million customers in this crazy market, with a price cap that forces margins to be 2%?
“What kind of sector lives on that kind of price margin? Not even the privatised water companies that are natural monopolies have that kind of margin. They have three times that margin. Is it an appealing market? I don’t think so.”
In response, a spokesperson for the Department for Business, Energy and Industrial Strategy (BEIS) said: “The energy price cap remains in place to protect millions of customers and will not be rising before the next scheduled review in April 2022.
“It is the best safety net available to protect consumers from excessive price hikes, ensuring they pay a fair price for their energy.
“To help consumers, we’ve launched an extra £500 million Household Support Fund for those most in need, on top of other schemes like the Warm Home Discount, which is being increased to £150 and extended to an extra 780,000 households, to support the most vulnerable.”