[Finance] Another energy supplier into administration

[Brian Potter]

Bulb are the latest to fall..

https://www.theguardian.com/busines...s-17m-customers-collapses-into-administration

 

[strings]

Not surprised by this in the slightest. They have been hiking people's payments en-masse, presumably hoping to fix some kind of cashflow issue. My bulb account says they estimate that I will use on average £100/month gas and electricity this winter, so they set my direct debit at £142 (even though my account is in credit).

 

[Jesus Gul]

Hopefully they still owe the ad agency a few quid.

 

[beorhthelm]

Hopefully they still owe the ad agency a few quid.

a reminder green power still relies on gas.

 

[Thunder Bolt]

It's about time Ofgem did something to sort this out. Customers still have supply but are left in limbo as to where they are paying.

 

[Badger Boy]

I've always been a bit skeptical of energy companies. Aren't they just charging you a premium for energy which is provided by the national grid anyway? Did we ever actually need dozens of these companies?

 

[Springal]

I've always been a bit skeptical of energy companies. Aren't they just charging you a premium for energy which is provided by the national grid anyway? Did we ever actually need dozens of these companies?

Depends if you want competition or not. Until the last 6 months or so - the 'big 3' have never been the cheapest suppliers of energy

 

[Thunder Bolt]

I've always been a bit skeptical of energy companies. Aren't they just charging you a premium for energy which is provided by the national grid anyway? Did we ever actually need dozens of these companies?

No. It was meant to provide competition to drive down prices, but, in reality, didn't. There were lots of take over bids, and the number of companies diminshed, so it ended up as a cartel in any case.

 

[Official Old Man]

Bulb are the biggest 'small' company to go under with over 1.7 million customers. Seems they are too big for other companies to handle and as such they will continue to trade but run by the Ofgem.
I heard a story about these companies not taking out insurance on price rises. So should they buy up gas months ago or can you insure yourself over price rises bigger than your charges?

 

[Lower West Stander]

No. It was meant to provide competition to drive down prices, but, in reality, didn't. There were lots of take over bids, and the number of companies diminshed, so it ended up as a cartel in any case.

Well it did drive down prices and would have kept doing so if the suppliers hadn't got their hedging wrong. That's their fault.

That's more a failing of the business model than anything else. The price cap and Regulator have actually kept things quite supportive for customers. Natural gas is a traded commodity - the price cap is massively helpful against the basis risk.

 

[beorhthelm]

I've always been a bit skeptical of energy companies. Aren't they just charging you a premium for energy which is provided by the national grid anyway? Did we ever actually need dozens of these companies?

probably not. we ended up with a number of energy hedge funds in effect. others only competitve due to lower tax and levy. only a few offered a real service and added value to the market.

 

[Thunder Bolt]

Well it did drive down prices and would have kept doing so if the suppliers hadn't got their hedging wrong. That's their fault.

That's more a failing of the business model than anything else. The price cap and Regulator have actually kept things quite supportive for customers. Natural gas is a traded commodity - the price cap is massively helpful against the basis risk.

It's 30 years down the line and the competition wasn't that great.

 

[BBassic]

I'm with Bulb. Have been taking weekly screenshots of my account credit and smart meter readings so am set if whichever supplier I end up with tries anything funny.

 

[Badger Boy]

Depends if you want competition or not. Until the last 6 months or so - the 'big 3' have never been the cheapest suppliers of energy

No. It was meant to provide competition to drive down prices, but, in reality, didn't. There were lots of take over bids, and the number of companies diminshed, so it ended up as a cartel in any case.

probably not. we ended up with a number of energy hedge funds in effect. others only competitve due to lower tax and levy. only a few offered a real service and added value to the market.

Thank you all for your replies, it's not something I claim any expertise in but was curious because it seems like a fairly typical market correction to me. Too many players and circumstances have shifted making these companies no longer viable.

 

[pb21]

Not surprised by this in the slightest. They have been hiking people's payments en-masse, presumably hoping to fix some kind of cashflow issue. My bulb account says they estimate that I will use on average £100/month gas and electricity this winter, so they set my direct debit at £142 (even though my account is in credit).

Same. I think this started last year when they said they wanted to increase my winter payments as I use more in winter. I eventually got through to someone saying my monthly payments are deliberately spread evenly throughout the year, over pay in summer to balance underpayment in winter, which was part of their sales blurb.

Then recently trying to suggest I change my DDs to £86 instead off £60 which is what my current average monthly payment is, and being £40 in credit

 

[Audax]

Same. I think this started last year when they said they wanted to increase my winter payments as I use more in winter. I eventually got through to someone saying my monthly payments are deliberately spread evenly throughout the year, over pay in summer to balance underpayment in winter, which was part of their sales blurb.

Then recently trying to suggest I change my DDs to £86 instead off £60 which is what my current average monthly payment is, and being £40 in credit

Been longer than that. Their "automated" system kept trying to get me to up my monthly by over £30 per month back in 2019. At the time they were asking me to increase to £130+ per month when average monthly usage over a prolonged period of time that I'd been with them was a tick over £100 per month.

From what I've seen, they've been borderline for a while. Reporting is highly suggestive that they over-extended themselves trying to expand the business, and that's caused cash flow issues even before the gas price spiked. They were courting investors and/or a takeover bid before the crisis hit, but all the prospective investors/buyers ran a mile as soon as the price spiked.

I'm fully expecting in 6 months time for the end result of the attempt to create competition to break up the "big 6" situation of several years ago will be a return to a "big 6 or 7" with slightly different names in a couple of the seats. Ovo and Octopus should survive. Anyone smaller than them I expect to crash out unless the prices correct rapidly.

 

[Bodian]

Somehow I've ended up £240 in credit with Octopus. I was in debit, they put my DD up to £65, and over two years I've built up credit without really noticing. They have just offered to decrease it, but I thought it probably isn't worth it - because when the fixed rate ends in March it'll shoot up anyway, so might as well give myself a bit of a cushion!

 

[banjo]

I was with Green energy, 3 months later and still waiting for Shell energy who took over the account to bill me.

 

[METALMICKY]

I'm with Bulb. Have been taking weekly screenshots of my account credit and smart meter readings so am set if whichever supplier I end up with tries anything funny.

So would anyone with Bulb be advised to now cancel any Direct Debit? On the basis that whoever you are transferred to would contact you for the payment details.

 

[Audax]

So would anyone with Bulb be advised to now cancel any Direct Debit? On the basis that whoever you are transferred to would contact you for the payment details.

No. Martin Lewis very clear: do nothing, just carry on as normal.