The council last month appointed EY to assess its viability. Last night (Tuesday) the council reviewed the auditor’s recommendations.
Bristol Mayor Marvin Rees cuts losses on Bristol Energy
Mayor Marvin Rees: turnaround not possible, we’re cutting losses
“Establishing an energy company was always a high risk for the council, and one which has brought continued challenges,” said Mayor Marvin Rees. “The energy market is dominated by well-established far larger energy providers.”
Rees said he had inherited a failing company from the previous administration and that turning it around had “proved impossible in such a volatile marketplace.”
To date, the council’s cash investment in the energy company stands at £36.5m, against a total cash funding envelope of £37.7m.
Bristol Energy posted an adjusted operating loss of £10.1m for the financial year 2018-19, its third year of trading. That was roughly the same loss as the previous year, despite increasing turnover 45 per cent to £76.2m.
It has 100,000 customers including a small number of businesses. It has power purchase agreements with 54 renewable generators.
Fellow council-owned supply company Nottingham Energy is also struggling with heavy losses and has appointed auditors Deloitte.
Given the collapse in business demand and likely bad deb issues arising from Covid-19, another round of supplier failures is likely. Ofgem is attempting to flatten the peak of market exits by brokering a £350m loan via deferred network payments.