Centrica plc, through its British Gas business, has agreed to acquire the energy supply customers of Robin Hood Energy Limited for an undisclosed sum.
Robin Hood Energy, Nottingham City Council’s not-for-profit energy company, currently serves around 112,000 residential customers, and 2,600 business customers across 10,000 sites.
Completion of the transaction is expected on 16 September with customers moving to British Gas over the next few months.
According to Nottingham Post, 250 people are expected to be made redundant as a result of the sale.
Councillor David Mellen, leader of the city council, told the Nottingham Post: “The review we have been carrying out over the last six months has been comprehensive and considered a range of options for the future of Robin Hood Energy.
“Significant improvements have been made in the financial performance of the business under the new management team the council appointed last year.
“However, given the current economic climate and the further levels of investment needed to enable the company to compete in an extremely difficult market, the review concluded that a sale was the right option.
“It provides the best possible deal for the council and city residents and reassurance to customers that they are transferring to a large, well-established company.
“We know this is a very sad day for the business and its employees who have played a part in creating a more dynamic and customer orientated market for all energy consumers.
“The energy market has changed considerably over the last few years.
“At its peak there have been over 70 energy suppliers competing to win new customers and the introduction of price caps has fundamentally changed the landscape with many smaller suppliers exiting.
“The council set up Robin Hood Energy back in 2015 in response to the level of fuel poverty in the city and concerns that energy industry was not acting in the best interests of consumers, particularly those who relied on pre-payment meters.
“The aim was to reduce energy prices in Nottingham and the company achieved this initially.”
In March, Robin Hood Energy revealed a significant loss of £23.1m for the period April 2018 to March 2019.
Last October, the Nottingham City Council gave Robin Hood Energy an emergency loan of £9.5m for its Renewable Obligations Certificate payments to Ofgem.
In the coming weeks, Robin Hood Energy customers will be given information on the process of moving.
Chris O’Shea, Group Chief Executive of Centrica, commented on the announcement: “As well as our actions to simplify and modernise our business, we are focused on returning to profitable growth in our core markets and investing in value-generating opportunities.
“Our customers are at the heart of everything we do, and we are delighted to welcome Robin Hood customers to British Gas.”