Britain’s fastest-growing power supplier has bucked the trend for cheaper energy deals by raising its electricity prices for the second time this year, even as rivals lower their tariffs.
Bulb Energy will ask customers to pay on average an extra £53 a year for their electricity from October, after increasing their power prices by £22 a year in March.
The supplier blamed the hike on rising wholesale energy markets and the cost of supporting the government’s policies. The move will impact its electricity-only, dual fuel and prepayment customers.
Most large suppliers prepare to cut their tariffs in line with the energy regulator’s cap on prices, which will fall by £84 a year to £1,042 a year for the average UK home from October.
Bulb said its prices would be cheaper than the default deals offered by others and would be £75 below Ofgem’s energy price cap, even after raising its rates.
Ofgem lowered the price cap to reflect weaker energy market prices over the past year, which reduces the cost of supplying homes, but Bulb said the recovery over the past five months meant it could have not avoided raising bills.
Hayden Wood, the co-founder and chief executive of Bulb, said the cost of supplying homes had “gone up significantly” and that Bulb “held off passing on the cost for as long as possible”.
Energy market prices have begun to rise since slumping to record lows during April, when lockdown measures to prevent the spread of the coronavirus caused the UK’s electricity demand to fall by a quarter.
At the time, Bulb raised its electricity prices despite the historic market slump, blaming the rising cost of policies to support renewable energy projects and network upgrades.
“At Bulb, we’re committed to pricing fairly and transparently,” Wood added.
Bulb has emerged as one of the UK’s fastest-growing energy companies by offering low prices with the help of its hedge fund backers at Magnetar Capital and DST Global.
The backing valued the company at an estimated £350m in late 2018, but the Guardian understands the company’s upcoming fundraising will target new tech investors on the US west coast.
Bulb is eager to clinch a “very large valuation” by presenting itself to investors as a tech company, according to an industry source, but the cut-price energy retailer “may struggle to hit high valuation levels” because it owns very little of its own technology.
A Bulb spokesperson said the “well-funded” supplier had enough funding to support its operations and future growth, and that its investors supported these plans.