Octopus to accuse Bulb rivals of rewriting history

Octopus Energy will tell the High Court next week it was not given any additional information about government support prior to its acquisition of Bulb, Utility Week understands.

The supplier, which has already onboarded a third of the Bulb customer base since completing the acquisition of its 1.5 million accounts in December, will also argue against accusations that the government could have secured a better deal. According to court documents seen by Utility Week, Octopus will claim that it now expects the government to make a £1.2 billion profit on the deal.

The arguments will be thrashed out in a judicial review into the sale of Bulb to Octopus, brought by rival suppliers against the government, which is due to begin next Tuesday (28 February).

British Gas, Eon and Scottish Power challenged the decision on the grounds that Octopus was offered different terms to other suitors for the nationalised energy supplier and that the secretary of state could have secured a better deal.

Octopus is expected to argue that it was not privy to any more information about government support than other participants at an equivalent stage of the process.

Furthermore, it will highlight the fact that it progressed further in the process than any other potential bidder and that as a result it was necessarily provided with more information and investigated the opportunity in greater detail than other participants.

Additionally, the supplier will cite the latest cost estimates, which show that the hedging support is expected to amount to £1.76 billion. However, due to the structure of the deal, Octopus will be paying back £2.95 billion, leaving the government with a £1.19 billion profit.

Previous estimates from the Office for Budget Responsibility had the total cost to the taxpayer at £6.5 billion.

Bulb was the most high-profile failure of the energy crisis when it became the first ever retailer to enter the government’s Special Administration Regime (SAR) in November 2021.

Following a year-long competition process in which it is understood Centrica and Abu Dhabi-based energy company Masdar were in the running, Octopus was selected as the supplier to take on Bulb’s 1.5 million customers. The deal means Octopus now supplies almost 5 million customers in the UK.

Despite the transfer of customers being scheduled for 15 November, the challenge by Scottish Power, British Gas and Eon resulted in the transfer being delayed by a High Court judge until late December.

Octopus expects to complete the transfer of the final two-thirds of Bulb’s customers over the next couple of months.