Utility Week

UTILITY WEEK | MAY 2023 | 35 Energy Bulb case closed After much acrimony, Octopus has at last been cleared to take on the customers of failed supplier Bulb, after the High Court rejected calls for a judicial review into the government's decision. that all of them withdrew or stopped engag- ing for their own commercial reasons." In addition to the arguments being thrashed out in court, concerns were raised about the impact a decision to overturn the Bulb deal could have on consumers. Tim Speed, energy partner at law firm Shakespeare Martineau, told Utility Week before the judgement: "If the subsidy is set aside, Octopus will be le with all the cus- tomers. If the approval of the whole scheme is set aside, then it really is not clear what will happen. "Octopus has already started onboard- ing customers, a number would have been transferred since December and they'll all have their own private contracts now with Octopus, deemed or otherwise. It is not at all clear how any court order would affect these private contracts. "There will also be customers, presuma- bly, that have been moved from Bulb to Octo- pus and have subsequently moved elsewhere. Although probably not very many in the current climate, it is not at all clear how these would be dealt with. The whole situation could be chaotic." A summary of the ruling following the hearing said: "The Court con- cluded that the need for urgency in bring- ing any public law challenge was clearly apparent by 11 November 2022, and it was incumbent on the claimants to move very speedily a er that date. "The claimants were aware of the essential substance of their grounds for seeking judicial review at that stage. In those circumstances, the court concluded that the applications for permission must be refused on grounds of delay alone." The ruling added that granting a judicial review application a er such a long time "would be likely to cause substantial hardship" and have a "detrimental" impact on members of the public affected by the sale of Bulb. The court additionally rejected claims that the secretary of state had acted unlawfully. A Department for Energy Security spokesper- son said: "We welcome today's judgment. The court has confirmed the robustness and legality of the secretary of state's actions. "In doing so, he has protected Bulb's 1.5 million customers, while delivering value for the British taxpayer." While sources close to the company said they understand that Scottish Power will not seek to appeal the decision, there is still uncertainty as to whether Eon and British Gas will. Responding to the ruling, Michael Lewis, Eon UK chief executive, said: "A huge amount of public money has been used to subsidise this transaction and it's absolutely correct that any use of public money to help a private company grow in this way should be thoroughly scrutinised. "We will analyse the detail of today's rul- ing and consider our next steps, including whether to appeal, but we remain concerned about the amount of taxpayers' money that has been used to subsidise the deal. "Only an open, fair and transparent pro- cess would have ensured this truly repre- sented value for money for the public and we still cannot see how this was the case with only one bidder in the key stage of the negotiations." Trail of destruction Lewis added: "The background to this whole issue is a lack of proper financial controls on new entrants to this market and that their risk-taking behaviour was never properly managed. These failings allowed companies like Bulb – and nearly 30 others – to effec- tively use and lose customers' money, leav- ing a trail of destruction when they failed, with the British public picking up the tab. "We urgently need to establish rules that mean customers' money cannot be used to fund a business when suppliers have no equity on their balance sheet." A Centrica spokesperson said: "It's regret- table that Centrica, Scottish Power and Eon had to bring this case to court in the first place and it's a disappointing judgement. "The decision to bring this case was made a er failed attempts to obtain transparency on the terms of the transaction and the level of bailout being offered to Octopus/Bulb. "We believe that the way the deal was structured creates serious risk for taxpayers and energy consumers and will distort the energy market. We will review the judgement carefully and consider our options." Smacks of desperation Meanwhile, Octopus Energy chief executive and founder Greg Jackson said the "judge- ment couldn't be clearer" in that his com- pany "paid fair value for Bulb through a transparent and competitive process, giving the best available deal to taxpayers". He added: "There were no improper subsidies and the case brought by Brit- ish Gas and their stablemates was entirely without merit. "This belated and expensive court action has always smacked of desperation – and today's finding confirms that. Octopus worked hard to find a solution, while others chose not to bid. "Fair play won. A er more than a year of uncertainty, it's a huge relief for Bulb's employees and customers and good news for taxpayers. "We'll continue to relentlessly innovate to create a cheaper, cleaner energy system and better service for customers. "Looking at the records of some of these companies, it's clear they'd be better busi- nesses if they focused on putting their own houses in order." Bulb was the most high-profile failure of the energy crisis when it became the first ever retailer to enter the government's Spe- cial Administration Regime (SAR) in Novem- ber 2021. Following a year-long competition pro- cess in which it is understood Centrica and Abu Dhabi-based energy company Masdar were in the running, Octopus was selected as the supplier to take on Bulb's 1.5 million cus- tomers. The deal means Octopus now sup- plies almost 5 million customers in the UK. Adam John, senior reporter

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