Fears are mounting for Britain’s seventh biggest energy firm, Bulb, amid reports it will collapse as early as next week.
The company, which has 1.7 million customers, is the latest to be driven to the brink due to soaring energy costs, which have already forced the closures of 14 suppliers.
And it came as energy regulator Ofgem warned seven other firms may also face action after falling behind on payments required to support the UK’s switch to green energy.
The seven, which serve around 500,000 customers, owe a combined total of £17.9million.
Bulb, which has 1.7 million customers, is being threatened with going bankrupt.
Ampower Energy and Whoop Energy were warned to pay their bills by Monday or risk losing all their licenses.
The other five – Together Energy, MA Energy, Delta Gas and Power, Entice Energy and Neon Reef – could also face further orders.
Bulb’s demise would mark the largest failure to date in the ongoing energy crisis – coming weeks after Avro Energy, which had 580,000 customers, went bust.
Yesterday Bulb announced that it was in talks to secure additional funding to ensure its future.
However hopes are said to be fading, according to Sky News, with ministers, officials and Ofgem representatives allegedly making ‘contingency plans’.
The crisis comes amid firms’ concerns over the energy price cap, which stops them from passing on a sudden surge in wholesale gale and electricity prices.
Consumers face eye-watering increases to their energy bills in the winter months (stock photo)
The cap rose to £1,277 earlier this month – an annual rise of £139.
The Government has backed the price cap, insisting it is a vital consumer protection that could prevent households from paying as much as £2,000.
Ofgem stated yesterday however that it is ready to examine how it works.
Currently, the figure changes just twice a year – April and October – but this be could be increased to every three months to better reflect price volatility.
Bulb claims to be a green energy supplier but it is not immune from the price rise in fossil fuels.
All of the firm’s electricity comes from renewable sources such as windfarms but it also buys natural gas on the wholesale market, offsetting the carbon emissions by supporting eco-projects, such as planting trees.
Bulb is being considered by potential buyers from Ovo Energy and Octopus Energy, which are rival suppliers.
However, if rescue negotiations fail, it will have to close down and all its customers will be switched over to a new supplier.
Bulb’s demise would mark the largest failure to date in the ongoing energy crisis – coming weeks after Avro Energy, which had 580,000 customers, went bust (stock image)
Bulb stated that a slight fall in wholesale prices over the past few days had provided some relief.
However, yesterday’s gas price was 177p per therm (versus 50p in April).
A Bulb spokesman said discussions were ‘making good progress;, however it added that it expected the Government to ‘monitor’ the effect on the industry.
Writing to suppliers yesterday, an Ofgem spokesman acknowledged that the ‘unprecedented rise’ in energy prices had ‘changed the perception of risk and uncertainty in the market’.
It added: ‘In order to protect the interests of consumers, we must ensure that the regulatory frameworks, including the price cap, fully reflect the costs, risks and uncertainties facing the supply companies we regulate.’