- Centrica
- 31 March 2023 13:46:08
Source: Sharecast
The companies argued that Octopus Energy received special treatment, and that there were flaws in the subsidy process that gave Octopus state support for buying Bulb out of administration.
They also claimed that the sale was not handled fairly, leading to the government committing billions of pounds of taxpayer money to facilitate the acquisition.
However, Judges Lord Justice Singh and Mr Justice Foxton rejected the legal challenge, calling it “not reasonably arguable”.
They also said the application was made with “undue delay”, as the proceeding was not brought to the court quickly enough.
“It’s clear that the case was a desperate attempt by those organisations to defend their waning market positions against a more efficient and customer-focused rival,” an Octopus Energy spokesperson told Bloomberg.
Bulb collapsed in 2021 when wholesale prices spiked above the regulator’s price cap, forcing it to sell energy at a loss.
The government took on Bulb in the biggest bailout since the financial crisis as, at the time, it was too large for any solvent energy retailers to be willing to take on.
At the time the sale was agreed, the Department for Business, Energy and Industrial Strategy (BEIS) said it approved the deal to protect consumers and taxpayers.
According to the National Audit Office, the gross cost to taxpayers from Bulb’s collapse in November 2021 to the end of January this year was over £3bn.
Octopus was expected to repay £2.96bn of that, although not until 2024 and into 2025.
“We believe that the way the deal was structured creates serious risk for taxpayers and energy consumers and will distort the energy market,” a Centrica spokesperson was quoted as saying.
“We will review the judgement carefully, and consider our options.”
At 1327 BST, shares in Centrica were down 0.3% at 106.03p, while E.ON was up 0.39% in Frankfurt at €11.51.
Reporting by Josh White for Sharecast.com.