MPs to quiz ministers over rescue of failed energy supplier Bulb

Ministers will be quizzed by an influential committee of MPs over the decision to prevent administrators to Bulb, the collapsed energy supplier, from hedging wholesale purchases of gas ahead of unprecedented price spikes.

Sky News understands that the Business, Energy and Industrial Strategy Select Committee will summon ministers and Bulb executives to give evidence as part of an ongoing inquiry into Britain’s energy market.

One of the MPs’ main questions is expected to be the government’s decision not to implement a hedging strategy at Bulb after its collapse last November.

Subsequent rises in wholesale prices following Russia’s invasion of Ukraine are expected to mean that the cost to taxpayers of Bulb’s special administration will rise from an initial £1.7bn to as much as £3bn or more, Sky News reported this week.

Darren Jones, who chairs the committee, said: “This is the first time the government has had to take over a failed energy supplier but it might not be the last.

“I will be asking questions of government, Bulb and others to make sure expensive mistakes like this are not made again in the future.”

Bulb is estimated to have around 1.5 million users, who are being supplied gas now costing roughly ten times the level of a year ago on wholesale markets.

A government insider suggested that the decision not to hedge gas purchases complied with rules governing Whitehall spending.

A spokesperson for the Department for Business, Energy and Industrial Strategy said this week: “The Special Administrator of Bulb is obligated to keep costs of the administration process as low as possible, and we continue to engage closely with them throughout to ensure maximum value for money for taxpayers.”

Soaring wholesale prices are expected to make a sale process for Bulb’s customer base, which is being run by Lazard, significantly more difficult.

Bulb, like other suppliers, has been forced to raise prices for consumers, with analysts forecasting that typical household bills could soar beyond £3,000 after the autumn.

Bulb is the UK’s seventh biggest supplier and by far the largest of the nearly 30 to have collapsed since the start of August.