The company set up by Nottingham City Council to challenge the ‘big six’ energy firms has been placed into administration.
The Robin Hood Energy (RHE) customer base has been sold to Centrica – one of the ‘big six’, and administrators Deloitte is now in charge of the firm.
An outstanding £12.5 million owed for green taxes known as Renewable Obligations Certificates (ROCs), to energy regulator OFGEM, is expected to be spread across the rest of the energy market.
This effectively means all other consumers will foot the bill.
Labour-controlled Nottingham City Council has said it expects its total losses to be £38 million from the company.
It had been suggested that the £12.5 million would be taken by administrators from the amount Nottingham City Council receives from the sale, meaning Nottingham taxpayers would pay the bill.
But the city council says it expects the bill to be ‘mutualised’ from the rest of the energy market.
Speaking yesterday during a meeting of the full council, Councillor Sam Webster was asked about the £12.5 million payment by Councillor Kevin Clarke, leader of the Clifton Independents.
Councillor Clarke, who represents Clifton East, said: “Can the portfolio holder explain whether, as the current “parent” of Robin Hood Energy, Nottingham City Council will be liable for this bill and will this end up being yet another multi-million pound hit to our finances?”
Councillor Sam Webster, who is the portfolio holder for finance as well as the Labour councillor for the Castle ward, replied: “On January 5, RHE was put into administration.
“This followed a period in which the customer book was successfully sold to British Gas.
“Administration of course is the next step in the controlled exit of the business from the energy market, and follows the decisive steps taken last year to close the company while trying to provide the best outcomes achievable for customers, employees and creditors, including the city council and OFGEM.
During the period of controlled exit the company has helped to support 116 employees into new jobs (from a workforce of around 230), and given domestic and business customers choice in successfully moving their accounts to a new supplier.
“The administrator will now identify the available funds, including the proceeds of the sale of customers to British Gas, for distribution to creditors of the business.
“In terms of the funds referred to by Councillor Clarke, these will be dealt with as part of the process of administration.
“The cost of ROCs will be mutualised across the industry and we anticipate there will be no impact on NCC finances.”
Deloitte has been approached for comment.