BULB has fallen into administration, with around 1.7million customers affected.
It is believed that the collapse of the energy firm will cost tens of millions of pounds for taxpayers.
Bulb is the seventh largest energy firm – providing energy to one in 17 homes – but households will not be left without power while a replacement supplier is found.
It is the biggest provider by far to go under, with several other smaller firms struggling amid rising wholesale energy costs.
The provider announced the news to customers on its website, and told customers that their tariffs would not change and the price cap would still apply to bills.
Since Bulb is so big, the regulator Ofgem cannot simply get another supplier to take on the customers, as it has done with the 22 other firms who have gone bust since August.
Instead, Bulb has been placed into special administration – this means that it will be allowed to operate as normal and customers don't need to do anything.
A special administration requires the approval of the Business Secretary and is designed for cases where a larger supply goes bust.
Other firms including Ovo, Octopus and Shell Energy have been approached to ask if they would like to buy out Bulb, but the debts are thought to be too big.
It comes as Bulb investors are no longer willing to pump more money into the firm, with debts now thought to be more than £600million.
Regulators were on standby for the imminent collapse of the company as early as last month.
A rescue deal was in the works to save the company, but The Sun reported that hopes to pull the company back from the brink were fading.
One company which was considering a takeover of Bulb reportedly claimed the firm has liabilities of around £600m, which made a "solvent takeover of the company hard to envisage".
According to Sky News, 1,000 jobs could be at risk with the collapse of Bulb.
Providers have been struggling to cope with soaring wholesale energy prices.
Wholesale gas prices have risen 250% since the beginning of the year, creating a strain on the UK energy industry that has even toppled certain providers.
At least 12 providers have gone bust since the summer, with Utility Point and People's Energy the first of the list of small providers to go.
It comes as customers who see their supplier go bust this winter could face paying £400 more to new suppliers taking over their contracts.
That's on top of a record £139 increase to their energy bills from October.
Households will see their bills rise from £1,138 to £1,277 from Friday, when Ofgem raises the price cap – which limits how much households on default tariffs pay for their gas and electricity.
A Bulb spokesperson said: "We’ve decided to support Bulb being placed into special administration, which means it will continue to operate with no interruption of service or supply to members.
"If you’re a Bulb member, please don’t worry as your energy supply is secure and all credit balances are protected."
An Ofgem spokesperson said Bulb customers "do not need to worry" as Bulb will "continue to operate as normal".
The spokesperson added: "Customers will see no disruption to their supply and their account and tariff will continue as normal.
"Bulb staff will still be available to answer calls and queries.”
Uswitch energy policy expert Justina Miltienyte said the collapse of Bulb "signals a tipping point" of the UK's energy crisis.
She added: "With Bulb’s 1.7 million customer base, over four million people have now been directly impacted by the turbulent energy market."
What should you go if your energy supplier goes bust?
If your supplier folds, your energy won't be cut off, so there's no need to panic.
Ofgem will arrange an interim supplier so you won't have to go without.
Customers affected will be contacted by the new supplier, which will be chosen by Ofgem.
With the recent fall of People's Energy, for example, Ofgem has appointed British Gas to take on supplying the provider's 350,000 customers.
The new firm won't have to honour the deal you were on with your previous provider but any credit on your account will be protected.
Experts like Martin Lewis' MoneySavingExpert are advising customers not to rush to switch though, and instead "simply sit tight and wait to be contacted by a new supplier".
But it is recommended that you take a meter reading ready for when your new supplier contacts you.
Other charities also recommend keeping old energy bills and waiting until your new supplier is appointed before cancelling any direct debits.
We pay for your stories!
Do you have a story for The Sun Money team?
Email us at [email protected]
Source: Read Full Article