Energy firm Bulb under fire for monthly bill rises of up to 80%

6th October, 2021.      //   General Interest  // 

<span>Photograph: Alamy</span>

Energy company Bulb has come under fire from its customers who say it is using them like a bank. It is forcing them to pay higher bills even when many of them are hundreds of pounds in credit to the supplier.

The bumper increases – by as much as 80% – could be an indicator of what is in store for customers of other suppliers grappling with record gas market prices following a week in which three more firms went to the wall. Igloo Energy, Symbio Energy and Enstroga all went bust last week.

Bulb, which has 1.7 million customers, has recently been at the centre of takeover speculation and is hunting for fresh investment to fund the company. It says on its website that it offers “fair prices that stay fair” – but customers have flooded Twitter to complain about the monthly price increases and to ask whether this is happening because the firm is having money “problems”.

Bulb dismissed any suggestions that it was trying to prop up its finances and said it was standard practice for an energy company to review what people paid and make sure their accounts were healthy as winter approached.

Bulb announced in August that its gas and electricity prices would be going up on 1 October broadly in line with the regulator’s price cap, which rose by 12% for dual fuel on the same date. Bulb said then that a typical customer would pay £2.90 a week more. Separately, however, it has carried out a pay review for many customers which has resulted in people receiving emails this week.

Among them was Karen Constable, a single parent with a four-year-old and a six-year-old, who was shocked to be told that Bulb wants to increase her monthly payment from £104.84 to £187.58 – a 79% hike. The company told her this would be her new monthly payment from 20 October and would apply for the next seven months.

Constable, who lives in Glasgow and works part-time, said her account was £317 in credit and her last bill was £70. She said that she had “never even had a monthly bill as much as my usual agreed monthly payment of £105”.

Another customer, Ralph Worby, received an email saying Bulb wants to hike his monthly payment by 61%, from £52.70 to £85.06. Worby tweeted: “I’m £152 in credit and September’s statement was £36. I’d like to know the logic in increasing it to £85.”

Many of the emails state that “although your account is in credit, you’re currently using more energy than your monthly payments can cover”, before going on to outline new, higher monthly payments to “avoid your account building up debit over winter”.

Many other customers are facing increases of 30% to 40%.

Jamie Irvine, who lives in Liverpool, said Bulb wanted to put his direct debit payment up from £192 to £256.81 a month – an increase of £64.81.

He told the Observer that nearly £65 extra a month was “insane”, adding: “When I got that email last night, it was a good job I was sitting down, otherwise I’d have fallen over.”

Irvine said his bills came in at roughly £125 a month, adding that though he currently paid £192, some of that went on to his account as credit. He said he had cancelled his direct debit – instead he will pay the bill on the app when it comes in every month – “and I’ll be investing in warmer clothes and blankets this year”.

Other energy providers have taken a different approach. British Gas recently told customers that while its prices were also increasing on 1 October, in line with the price cap, “we won’t increase your direct debit to help keep costs affordable for you this winter” – though some might argue this is merely delaying the pain.

Unlike some rivals, Bulb does not offer lots of different deals – it has one tariff, which is variable, and customers pay a flat amount each month.

Bulb has proved popular with many because of its claim to supply every customer with 100% renewable electricity and 100% carbon neutral gas – but this does not offer protection from rising fossil fuel costs.

The Observer passed details of some of the price increases to Bulb, which confirmed they were correct. Asked about the rises, a spokesperson said: “Every year as we head into winter, we contact our members to give them an update on their account and make sure it’s healthy, as people tend to use more energy during the colder months. We’re doing that as usual this year, and will work with our members to make sure their payments are right for them.”

Octopus Energy has been named in reports as one of the suppliers that could consider bidding for Bulb, which made a £63m loss in the year to 31 March 2020.

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