Court sets effective time for energy transfer scheme

Administrators of energy supplier Bulb Energy sell Bulb’s business using an Energy Act energy transfer scheme. The Court set an effective time for the energy transfer scheme, holding that their role in the process is limited.

Bulb Energy is an energy supplier which, with its 1.7 million customers, collapsed into special Administration in November 2021.

The administrators of Bulb have since sold Bulb’s business to Octopus Energy. The sale involved the first use of an energy transfer scheme (“EST”) under Schedule 21 of the Energy Act 2004, as modified by section 96 the Energy Act 2011. The EST is a statutory tool which allows the administrators to transfer Bulb’s rights and property to a different supplier without consent from affected parties (for example, contractual counterparties). The EST is subject to the Secretary of State’s approval and modification.

Pursuant to the Acts, the administrators were required to apply to Court for the Court to set the effective time for the EST (namely, when the EST would take effect). 

Various energy suppliers challenged the EST by arguing that the Court had to assess the merits of the EST and also whether it achieved both of the section 95(1) purposes of the special administration. This included securing continued energy supply at the lowest cost reasonably practicable. 

However, the Court concluded that its role was limited to establishing it had jurisdiction to hear the application, the administrators had followed the required process and the nominated time would allow for a smooth transition. The Court concluded these requirements had been satisfied and ordered an effective time for the EST. The Court also noted that the lowest cost requirement related to Bulb’s supplying of its customers whilst it is traded during the special administration and not the buyer’s prospective supply.

Cowlishaw v Octopus Energy Retail 2022 Ltd [2022] EWHC 3105 (Ch)

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