Treasury officials have not estimated what proportion they expect to be used of the £1.7 billion they have promised to lend to failed energy supplier Bulb to make sure the lights stay on for customers.
Charles Roxburgh, the second permanent secretary to the Treasury, said he did not know how much Bulb would need.
“We don’t know how much of that will be used, it will depend on the final cost of the administration, which at this stage we don’t know,” he told MPs on the Treasury Select Committee.
“The administrator is required to do the administration at the lowest cost possible, but we’re not going to make any estimates of how much we’ll need.”
He said Business Secretary Kwasi Kwarteng can put a levy on the industry to recoup any money Bulb is unable to pay back.
If the costs are passed on to the industry, they are likely to find their way on to household bills.
He said that any conditions attached to the levy have not been decided.
Bulb collapsed last year, and entered a special administration on Wednesday after an application from energy regulator Ofgem, backed by Mr Kwarteng.
It is one of 25 suppliers to enter administration since the beginning of September.
Customers of all the other failed businesses were transferred to a new supplier, but if Ofgem had done the same with Bulb’s 1.6 million customers it could have put too much pressure on the new supplier.
Bulb will instead continue to supply energy while being led by an administrator.
“Obviously we’re facing a very challenging and unprecedented situation in the energy supply market, given the fivefold increase in wholesale gas prices,” Mr Roxburgh said.
“In order to ensure continuity of supply, which is the critical consideration here, we needed to make a £1.7 billion loan facility available to cover the administrator’s needs.
“It’s a decision for the Secretary of State for Business as to how to secure repayment, he has the powers to impose a levy on the industry in order to get repayment. The terms and conditions of that will be decided in due course.”
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