Minister for Energy (): Today I will lay before
Parliament a Departmental Minute describing a contingent
liability arising from the issuance of a letter of credit for the
Energy Administrators acting in the Special Administration Regime
for Bulb Energy Limited (‘Bulb’).
It is normal practice when a Government Department proposes to
undertake a contingent liability of £300,000 and above, for which
there is no specific statutory authority, for the Department
concerned to present Parliament with a minute giving particulars
of the liability created and explaining the circumstances.
I regret that, due to negotiations with the counterparty having
only just concluded, I have not been able to follow the usual
notification timelines to allow consideration of these issues in
advance of issuing the letter of credit.
Bulb entered the Energy Supply Company Special Administration
Regime on 24 November 2021. Energy Administrators were appointed
by court to achieve the statutory objective of continuing energy
supplies at the lowest reasonable practicable cost until such
time as it becomes unnecessary for the special administration to
remain in force for that purpose.
My Department has agreed to provide a facility to the Energy
Administrators, with a letter of credit issued, with my approval,
to guarantee such contract, code, licence, or other document
obligations of the company consistent with the special
administration’s statutory objective. I will update the House if
any letters of credit are drawn against.
The legal basis for a letter of credit is section 165 of the
Energy Act 2004, as applied and modified by section 96 of the
Energy Act 2011.
HM Treasury has approved the arrangements in principle.
