Bulb eyes special administration following ‘skyrocketing’ gas prices

By Sarah Lizee

Olympia, Wash., Nov. 23 – Bulb Ltd. is planning to enter into special administration, according to a company statement issued Monday.

“When we started exploring fundraising options, we were delighted to receive lots of interest from investors to fund our business plans and future growth,” the company said in its statement.

“However, the rising energy crisis in the U.K. and around the world has concerned investors who can’t go ahead while wholesale prices are so high and the price cap – designed to protect customers – currently means suppliers provide energy at a significant loss.”

The company noted that wholesale prices “have skyrocketed” and continue to be “extremely volatile.”

The gas supply shortage combined with lower exports from Russia and increased demand means they remain high and unpredictable, Bulb said.

“Prices have hit close to £4.00 per therm recently, compared with 50p per therm a year ago,” the company said.

“We’ve always been big supporters of the idea of a price cap to protect customers, but the current price cap is set at a level around 70p per therm, well below the cost of energy.”

The news last week about Nord Stream 2, a new gas pipeline from Russia to Europe which must be approved by Germany and the European Union, has sent gas prices back up again.

Last week, Germany suspended its approval process, and there’s growing geopolitical pressure to scrap the project.

As a result, the industry has seen many suppliers fail over the past few months and many more are expected to do so over the winter, Bulb said.

The special administrator is required by the government under the 2011 Energy Act to continue to supply energy to customers, and will protect customer credit balances, Bulb said.

The company said the process to appoint special administrators is not yet complete but it expects them to be appointed shortly.

Bulb said its international businesses in France, Spain and Texas are separate businesses and are not immediately affected by Bulb entering special administration.

Bulb is a London-based energy company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.