Portsmouth Council’s energy supplier will finally have its supply licences revoked more than a year since it was scrapped at a cost of at least £2.5 million.
Energy regulator Ofgem has announced that Victory Energy, which was founded in 2017, will have both its gas and electricity licences revoked, with effect from 25 March.
Rules stipulate that where suppliers have not commenced supply of gas or electricity within one year of the licence being granted Ofgem may revoke the licence.
Victory was formed with a view to the company generating £2 million a year for the local authority, but following a “change in the regulatory environment” and a change in administration, the plans for the supplier came in doubt and it was scrapped before it became operational.
The Liberal Democrat council leader Gerald Vernon-Jackson said the company would have needed “many millions of pounds of taxpayers’ money” to get it up and running and was not predicted to pay it back for up to eight years.
The scheme, which was approved by the previous Conservative administration, received significant investment to set up the company, the council said.
It confirmed the administration may lose at least £2.5 million already committed to the project, but the cabinet felt it “more responsible to cut the council’s losses” rather than risk spending further money with no guarantee of it being returned.
There were hopes that the scheme may have been resurrected after councillors joined forces in February last year to vote in favour of an amendment for its reinstatement. This never came to fruition, however.
Instead the business was put up for sale but in August last year the council announced it was closing down the venture after two offers for the company fell through and it was subsequently mothballed.