Business, Energy and Industrial Strategy

The Energy Prices Act 2022 received Royal Assent on 25 October 2022. The Act establishes the legislative framework necessary to deliver the Government’s energy support package and will ensure that households and businesses receive the urgent support they need to help pay their energy bills this winter.

To ensure these crucial schemes are placed on a secure legislative footing, the Government are tabling a number of statutory instruments (SIs) using the powers in the Energy Prices Act. These SIs contain the detailed regulations necessary to deliver our support schemes. They are essential in ensuring that the entire energy support package can be delivered this winter. To ensure energy consumers receive the urgent support they require, we are laying the majority of these regulations using the made affirmative procedure.

These regulations, subject to the made affirmative procedure, make provisions for the effective operation and implementation of the energy bill relief scheme. The GB energy bill relief scheme is established under sections 9 and 10 of, and schedule 1 to, the Act. The regulations provide powers to the Secretary of State to require suppliers to discount business bills, to require regular reporting by suppliers, to request information from suppliers and customers, and to require an audit of the supplier in relation to the scheme. In addition, the regulations will enable Ofgem to enforce the obligations placed on licensed suppliers under the schemes. Additional details of the schemes will be set out in accompanying rules. Guidance will also be issued.

These regulations, subject to the made affirmative procedure, make provisions for the effective operation and implementation of the energy bill relief scheme (Northern Ireland) which is established under sections 11 and 12 of, and schedule 2 to, the Act. The regulations provide powers to the Secretary of State to require suppliers to discount business bills, to require regular reporting by suppliers, to request information from suppliers and customers, and to require an audit of the supplier in relation to the scheme. In addition, the regulations will enable the Northern Ireland utility regulator UREGNI, to enforce the obligations placed on licensed suppliers under the schemes. Additional details of the schemes will be set out in accompanying rules. Guidance will also be issued.

These regulations, subject to the negative procedure, designate the domestic electricity price reduction scheme and the domestic gas price reduction scheme in Great Britain (the energy price guarantee) under the Energy Prices Act 2022. The effect of designation is that the provisions in section 2 and section 3 of the Act apply, including obliging suppliers to apply to join the scheme and, when joined, to remain in and comply with it. Ofgem is empowered to enforce compliance with the obligations set out in sections 2 and 3 using its existing enforcement powers. The regulations also designate district councils for an area in England for which there is a county council as a designated body for the purposes of section 15 of the Act. The effect of designation is district councils can now take action to support steps taken by the Secretary of State to meet energy costs under section 13 of the Act.

I am today updating the House on the mergers and acquisition process for Bulb Energy Ltd (‘Bulb’) in special administration.

Bulb Energy Ltd (‘Bulb’) was taken into special administration by an order of the court on 24 November 2021. Ofgem applied to court, with the consent of my predecessor but one, my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng), based on their determination that the special administration regime (SAR) was the most appropriate route for protecting Bulb’s circa l.5 million customers in the circumstances prevailing at that time—a recommendation which had subsequent BEIS accounting officer and ministerial concurrence.

The court appointed three individuals from Teneo Financial Advisory Ltd (‘Teneo’) as joint energy administrators and, following an application by Teneo, directed they enter into the circa £l.7 billion funding agreement with BEIS to support the achievement of their statutory objective of ensuring continuity of supply to Bulb’s customers at the lowest practicable cost until such time as the company may be rescued, or the business transferred to another company or companies. Bulb’s parent company, Simple Energy, was taken into “normal”—not special—administration on the same date by their secured creditors.

The energy administrators and their MSA advisers have delivered a competitive and extensive sales process over recent months, culminating in their recommendation to transact Octopus Energy’s bid as the optimal way to achieve their statutory objectives. Their recommendation has been reached after an extensive negotiation process to secure the best terms in the circumstances and detailed analysis of the counterfactual options, all of which show less favourable anticipated outcomes and carry significant operational and execution risks.