Octopus takeover of Bulb under watch by spending watch | energy industry

The spending watchdog will examine Octopus Energy’s acquisition of Bulb after the collapsed energy resource was bought from a state-run administration.

The Guardian understands that Gareth Davis, the Comptroller and Auditor General of the National Audit Office, has been tasked with working to examine the deal.

The National Audit Office, an independent parliamentary body, conducts investigations into areas of government spending and publishes reports to increase transparency. It is understood that the watchdog is in the early stages of its work and an update detailing the scope of the investigation will be published once it is approved by Davis.

The move comes amid calls for more transparency about the terms of the deal, which were agreed late last month, and a court hearing to confirm the acquisition will take place on Friday.

Neither Octopus nor the government has confirmed the price paid for Bulb, how long Octopus was given to pay for government purchases of energy for Bulb’s customers this winter, or the details of the “dividend share” agreement. A price between £100m and £200m has been reported but has not been officially confirmed.

Octopus CEO Greg Jackson said last week it’s a “fair deal” for taxpayers who need to see the “positive side” of emergency government bailouts. The energy company said it paid “above market value” to acquire Bulb’s 1.5 million customers.

The Department of Business, Energy and Industrial Strategy (BEIS) refused to confirm the size of Bulb’s customer credits in response to a Freedom of Information request by Guardian, citing a “business interest exemption.”

Estimates of the final cost of bailing out Bulb have varied widely from £1.2 billion to £4 billion due to the unpredictable wholesale gas market.

Bulb was among a wave of retail suppliers that went bankrupt during the energy crisis. The National Aviation Office said in June that consumers would need to pay £2.7 billion to cover the costs of 28 energy suppliers that have failed since June 2021, excluding Pulp.

Shadow Energy Secretary Alan Whitehead said the details of this process are of central importance to all taxpayers, energy consumers and the energy sector.

However, the government refuses to share any details about the terms of the deal. whether it is subject to competition; Or what costs will be incurred by families who are already struggling with the rising cost of living.”

He added: “Just repeatedly claiming that the details of this deal are commercially sensitive is not good enough and this lack of transparency stinks. The government should urgently publish the expected costs to taxpayers and the terms of the deal.”

Ms Claire Moriarty, Chief Executive Officer at Citizens Advice, said: “The Bulb Energy deal is currently shrouded in secrecy. There are big unanswered questions including what the costs will be and how it will be paid for.

“This is very concerning given the enormous cost of living pressures that people are facing. We need urgent reassurance that under no circumstances will the deal add to already high customer bills. People are still suffering from the collapse of the energy market. More transparency is one of the The main ways to restore their confidence in the system.

Octopus overcame a last-ditch attempt by rival Ovo to capture Bulb, while other bidders, including British Gas owner Centrica, fell earlier in the process.

If the Bulb deal is approved, Octopus will have 4.9 million customers and will be the UK’s third largest energy supplier after British Gas and E.ON. Octopus said there will be no layoffs among Bulb’s 800-strong workforce.

The National Aviation Bureau and Octopus declined to comment. A government spokesperson said: “While we cannot comment on the specific financial statements of the trade deal, given the high market volatility, the government is ensuring that we obtain the best possible outcome for Bulb’s clients and UK taxpayers.”