Octopus Energy ‘on brink of securing Government-backed deal to buy Bulb’

Bulb collapsed a year ago as soaring gas prices forced it to sell electricity at a loss.

Ex-PM Boris Johnson visited Bulb’s offices just months before it collapsed (Jeremy Selwyn/Evening Standard/PA) (PA Archive)

Octopus Energy is on the brink of sealing a deal to buy Bulb, its collapsed rival that has been run with billions of pounds of Government support for nearly a year, according to reports.

The Government could as early as this week help strike the deal which would see Bulb’s approximately 1.5 million customers transfer to the challenger brand, according to Bloomberg.

The deal is expected to see the Government pay Octopus to take on the customers. Octopus has reportedly asked for around £1 billion to deal with the customers.

The two energy companies were widely held up as success stories of the deregulation of the last decade which broke up the dominance of the Big Six suppliers.

The special administrator of Bulb is required by law to keep costs as low as possible

Department for Business spokesperson

However, faced with rapidly rising gas prices, Bulb was put under huge pressure last year, eventually collapsing in November.

It was one of dozens of energy suppliers to go out of business during the crisis. But Bulb was by far the largest, having around three times as many customers as its largest collapsed rival.

It meant that the company was seen as too big to fail by the Government and regulator Ofgem, who stepped in to put it under special administration.

The other energy suppliers had been dealt with by simply transferring customers to another supplier.

But experts said that transferring 1.5 million customers to another supplier in one big chunk could put it under too much pressure and perhaps spark further failures.

The Government refused to say whether a deal was close on Thursday, saying the process was commercially sensitive.

“The special administrator of Bulb is required by law to keep costs as low as possible,” the Department for Business, Energy and Industrial Strategy said.

“We continue to engage closely with them to ensure maximum value for money for taxpayers.”

However, the Office for Budget Responsibility has estimated that Bulb’s collapse could cost taxpayers around £2.2 billion over two years.

The money will later be recouped by increasing the energy bills of every household in the country.