Scottish Power has launched a broadside towards ministers’ dealing with of the sale of Bulb, the nationalised utility, accusing them of “distort[ing] competition” within the vitality retail sector.
Sky News has obtained a letter despatched by Keith Anderson, chief government of the Spanish-owned provider, to Jacob Rees-Mogg, the enterprise secretary, which successfully requires the public sale of Bulb to be scrapped and restarted.
Mr Anderson’s demand has emerged days after Sky News revealed that rival Ovo Energy was making an attempt to gatecrash the Bulb sale, which had seemed more likely to conclude with a takeover by Octopus Energy within the coming weeks.
Industry sources stated on Monday that each Ovo and Scottish Power have been involved that Octopus Energy would profit from £1bn of non permanent taxpayer funding.
In his letter to Mr Rees-Mogg, Mr Anderson wrote that that financing was “unfair” as a result of “no other supplier in the UK has access to such government funding and…in the current circumstances we believe other suppliers would be willing to acquire Bulb for a materially smaller level of government support”.
Mr Anderson didn’t explicitly say that Scottish Power can be focused on buying Bulb’s 1.6m-strong buyer base in its entirety, though vitality executives consider it will be eager to tackle a big chunk of Bulb’s prospects.
He stated in his letter that any funding supplied to Octopus Energy would place it “at a commercial advantage compared with other UK energy suppliers”.
“This in turn is likely to distort competition in the market for energy supply,” he added.
“This is unfair to other energy suppliers such as Scottish Power and is not in the public interest.”
‘Procedural unfairness’
Mr Anderson additionally alleged “procedural unfairness” within the Bulb public sale, saying that the unique deadline for bids had been set previous to the federal government’s determination to intervene available in the market by means of schemes such because the multibillion pound Energy Price Guarantee and the Energy Bill Support Scheme.
“Furthermore, at the time bids were invited there was no government support being offered to potential bidders.
“This background knowledgeable the strategy which potential bidders, equivalent to Scottish Power, took when deciding whether or not or to not submit a bid for Bulb.”
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One source suggested that Mr Anderson’s reference to “procedural unfairness” could hint at a potential legal action against the government in the form of a possible judicial review.
Scottish Power declined to comment on the letter.
Hopes of a deal with Octopus within weeks
A government spokesperson said: “The Special Administrators of Bulb are required by legislation to maintain prices as little as doable.
“We continue to engage closely with them to ensure maximum value for money for taxpayers.”
Further particulars of Ovo’s curiosity in Bulb stay unclear.
Ministers are stated to be hopeful of concluding a cope with Octopus inside weeks.
Were it to achieve success, a mixed Ovo and Bulb would have about 5.5 million family prospects – a measurement that would draw intense scrutiny from competitors regulators, in accordance with one analyst.
A £4bn rescue
Taxpayers’ rescue of Bulb is about to price the federal government as much as £4bn, Sky News revealed not too long ago, with that determine together with the £1bn of non permanent funding supplied as a part of a sale to Octopus.
The last-gasp try to scupper Octopus’s deal comes at a time of extraordinary turmoil in UK vitality markets.
The authorities has already been pressured to spend billions of kilos shopping for gasoline to provide Bulb prospects as a result of the corporate didn’t hedge its purchases to be able to repair its price base.
Wholesale gasoline costs have soared over the past 12 months, with Vladimir Putin’s invasion of Ukraine having a very pronounced affect on world vitality markets.
The chancellor, Jeremy Hunt, introduced this month that an enormous subsidy bundle for customers’ vitality payments can be scaled again, however it’s nonetheless anticipated to price many billions of kilos.
Octopus is known to have negotiated a deal that will see it paying between £100m and £200m to tackle Bulb’s buyer base, with a separate profit-share settlement giving the federal government a return for a number of years on earnings from Bulb prospects.
Bulb’s collapse in November 2021 was essentially the most vital amongst dozens of provider failures, with Ofgem, the business regulator, going through heavy criticism for its strategy to licensing new entrants to the market.
It was unclear on Monday whether or not talks concerning the sale of Bulb can be additional difficult by Rishi Sunak’s emergence as the brand new prime minister.
Source: information.sky.com”