Martin Lewis discusses Octopus Energy's acquisition of Bulb
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After nearly a year of uncertainty, Octopus Energy is now officially taking over dissolved Bulb’s 1.5 million customers, with all the loose-ends expected to be tied up by the end of this month. Bulb went into administration in November last year – with the delay in the process being blamed on “Bulb’s administrators finding the best solution for the company, employees and tax payers”. Just last weekend Octopus said it was paying the government to take on Bulb’s customer base and that taxpayers will benefit from a profit share agreement for up to four years. But with the nation submerged in an energy crisis – what does this aquisition actually mean for forthcoming gas and electric bill receivers?
Take a meter reading
Bulb’s ex-650 staff members will be transferred across in the coming weeks, after the firm was effectively put into public ownership. Industry regulator Ofgem scrambled to prevent former Bulb from passing on skyrocketing energy costs to customers – but was not successful.
The move has left much of Bulb’ customer base concerned about what the switch will mean for them, but these consumers will reportedly not need to do anything during the transition as everything will happen automatically.
Rocio Concha, director of policy and advocacy at Which? has however given one piece of advice. He told Chronicle Live: “As you wait to hear more, take a meter reading so your account is up to date, make a note of any credit you’ve built up and don’t switch suppliers – this can make it trickier to transfer you and pay back any money you’re owed.”
Which? also recommends that customers take photographs or screen shots of their current credit in order to verify that the switch has all gone ahead as planned. Customers can also be rest assured that their electricity or gas will not be cut off while the switch takes place, with any credit in their account guaranteed to be protected.
The switch is set to take a few weeks, but people should wait to be contacted, as Mr Concha said: “Your new supplier will get in touch to tell you about your new tariff, how payments will work and how you’ll get any credit back.”
The transaction to Octopus is set to be completed following a statutory process called an Energy Transfer Scheme (ETS). Under this process, Bulb’s assets will be transferred into a new separate entity to consumers during the transition.
The Government approved the agreement this week, but the process is subject to approval by the Business and Energy Secretary Grant Shapps. It will take effect at a time ordered by the courts, likely on November 11, for the transfer to become effective likely on 23.59 November 15.
Mr Shapps said: “This government’s overriding priority is to protect consumers and last night’s sale will bring vital reassurance and energy security to consumers across the country at a time when they need it most.
“This is a fresh start and means Bulb’s 1.5 million customers can rest easy, knowing they have a new energy home in Octopus.
“Moving forward, I intend to do everything in my power to ensure our energy system provides secure and affordable energy for all.”
Octopus Energy CEO Greg Jackson has argued that the taxpayer is getting a “fair deal” that “will bring to an end a period when the taxpayer is exposed to incredibly volatile energy prices”.
He told the Guardian: “As well as the fact we’re paying over the market rate we’ll be able to return some profit to taxpayers. We don’t want a world where taxpayers get the downsides and companies get the upside, we need to share both.”
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Octopus said its customers shouldn’t notice a difference while work is going on in the background to support people through the undeniably tough crisis scores of people are affected by.
Its website, which details further information about the transfer, spoke about the financial implications of the transfer, and said: “Since Bulb is currently unhedged, the Government will provide financial support to the new entity to purchase energy for Bulb customers over the course of winter 2022. This financial support will be repaid by the new entity in accordance with an agreed repayment plan schedule.”
MoneySavingExpert Martin Lewis said on his weekly money show: “You will automatically be moving to Octopus in November, now let me just be plain – your credit is safe, you do not need to cancel your Direct Debit, your supply and price won’t change because you’re on the price cap – basically, you don’t need to to do anything.”
He also said lots of people had been asking him if this was a “decent result” for Bulb customers. He added: “In my view, Octopus has a really high customer service rating in polls I’ve done and I did a lot of research and surveys on which companies were best at transferring customers and who made it as painless as possible and Octopus came top.”
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