Bristol City Council has appointed EY to conduct “a full and thorough assessment of Bristol Energy’s structure and future business viability”.
That structure may lie outside of council ownership, if a buyer can be found.
The news comes six weeks after the council brought in Allan Booth to try and turn the tide at the loss making energy company.
Two weeks ago Bristol Mayor Marvin Rees indicated the council will not be putting any more money into the company and criticised the previous administration for getting into the energy market, according to The Bristol Post. It has set a £37.7m funding ceiling, the paper reports, with Bristol Energy close to that cap.
Bristol is one of two local authorities to become a fully licenced supplier, alongside Nottingham City Council. Both are struggling, with Nottingham’s Robin Hood Energy recently appointing former Ørsted UK boss Jeff Whittingham to turn the business around after posting a £23m loss. (Update: Deloitte has now been appointed at Robin Hood, reports Utility Week.)
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 stated that wholesale market volatility during the period made trading and pricing “extremely challenging”.
The directors’ report also noted its plans to transition from an energy supplier to an energy services retailer. That shift comes as Bristol pushes forward with ambitious plans to decarbonise the city, seeking around a billion pounds of investment over the next decade to fund heat networks, city-wide energy efficiency projects and further renewables investment.
Bristol City Council said it could not provide further detail beyond a short emailed statement:
“Ernst and Young has been commissioned to provide professional advice to the Council by undertaking a full and thorough assessment of Bristol Energy’s structure and future business viability. A key objective is to mitigate the extent of any additional funding requirement from the Council beyond the existing agreed funding envelope.”
Set up in 2015, the energy company has 100,000 customers, including a small number of businesses. It has power purchase agreements with around 50 renewable generators.