The local authority has invested up to £37.7 million of council tax payers’ money into the company, which was initially expected to be in profit by 2019.
However, the latest projection has now forecast the break-even point to be 2023/2024.
Bristol City Council increased the amount of public cash it devoted to maintaining the business several times – more than doubling it from £15 million by April 2018 to the current level.
But it has now decided to appoint consultants Ernst and Young to find a buyer, despite mayor Marvin Rees previously insisting it would be “unwise” to sell it.
It is understood that any sale would recoup only part of the amount invested by the council, which wholly owns the company.
City council Lib Dem group leader Cllr Gary Hopkins said: “The mayor has broken his word on this and we need a full inquiry into what happened, including the decision-making and the information that was given out.
“There has been a misdescription of the money, which has been put down as an ‘investment’, which it clearly isn’t.
“We knew this was inevitable. They were pumping money in so they didn’t have to face up to the crystallisation of the debt. They were coming up with comments like: ‘It will turn around’, but frankly they had given up on that some while ago.
“Then the story was that the energy company would be useful for City Leap, which was also exposed as nonsense. The mayor had been timing things to get past the local elections before announcing it had collapsed. That became impossible because they were cancelled.
“He is now trying to deal with it under the cover of coronavirus.”
Mr Rees was asked for a comment on Monday (4 May).
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Cllr Hopkins said a special meeting of the full council to debate the future of Bristol Energy, which had been due to take place in March before the lockdown forced its postponement, would now be revived as soon as possible.
He said that despite promises from the Labour administration that opposition members would be kept fully informed of any developments, the first he had heard about the company’s sale was from a media report on Monday.
A Bristol City Council spokesperson said: “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.”
Asked about how the company’s sale would affect City Leap – the local authority’s ambitious project to build a low carbon energy system that was based on an outside investor willing to partner with Bristol Energy – a council spokesperson said: “We remain committed to delivering carbon neutrality for Bristol by 2030 and we know that this will require substantial external investment in Bristol’s future zero carbon energy system.
“It remains the case that City Leap has the potential to play a significant part in attracting that investment, as well creating opportunities for Bristol’s residents, communities and businesses to play their part.”
Bristol Energy was set up in 2015 under then-mayor George Ferguson to provide ethically sourced, low-cost energy, and with the aim of returning a profit for council tax payers.
But the company has posted total losses so far of £29.7 million, including £10.1 million in 2018/19, its third year of trading.
Last month, the mayor appeared to change tack after years of upbeat talk about the energy firm’s future when he said the decision to set up the business was “not sensible”, blaming previous administrations.
His comments came in a written reply to Conservative Cllr John Goulandris for Members’ Forum.
But Mr Rees added: “We have to be responsible with where we are and what we inherited.”
The council’s cabinet agreed behind closed doors in March to bring forward an unspecified amount of additional investment earmarked for further down the road, taking it closer to the £37.7 million ceiling the local authority has set for the total amount of money it will pump into the firm.
It is not known how close the council is to that limit because the agenda item was deemed exempt from the press and public on the grounds it contained commercially sensitive information.
Growing alarm about the financial state of Bristol Energy prompted Tory and Lib Dem councillors to call an extraordinary full council meeting last month before agreeing to its postponement because of the Covid-19 pandemic, having received “reassurances” they would be kept informed of developments.
They tabled a motion claiming they had been “gagged” and that the Labour administration was taking big decisions on the company without proper scrutiny.
The councillors branded Bristol Energy a “speculative venture” and said they were being “unreasonably constrained from expressing concerns” because major decisions were taken “behind a legal clock of commercial confidentiality”.
In response, deputy mayor with responsibility for finance, governance and performance Cllr Craig Cheney insisted the business was viable and accused the opposition members of playing politics immediately before what would have been the local elections campaign.