Victory Energy was set up during the city's Tory administration with a view to generate income for the council of around Â£2m a year.
But now the council's Lib Dem leader, Cllr Gerald Vernon-Jackson, has concerns about the company has tasked PricewaterhouseCoopers (PwC) with reviewing its profitability.
It is estimated that Victory will require a Â£12m loan from the council to get going.
Cllr Gerald Vernon-Jackson said: 'At the time Victory was created I said that I was worried that it had been created by a one-party cabinet. I was concerned there wasn't buy-in from everybody.
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'The business plan at the moment says that we would be profitable after three years. My concerns are whether it is being over optimistic in terms of the number of households that will sign up.
'To break even the energy company has to sign up 44,000 new households each year and there are only 85,000 in Portsmouth. And most households have never changed their energy provider.
'And it is everyone's money that is at risk, it will be paid for out of council tax. I want to be assured that this money is safe. Southampton have done it in a different way. They intend to use their energy company to lower prices for residents. But here the plan was to generate income for Portsmouth City Council.'
However, former leader Cllr Donna Jones, who originally championed the scheme, was confident the review would find in favour of Victory. She added: 'The risk is that if they put an end to the company they will be wasting over Â£1m that has already been set up which would be a travesty.
'I have no objection to the council leader paying a second lot of money to carry out an independent report on the company. It is right and proper that he should be reassured that it will work and then we can get on with having one of the best new energy energy supply companies on the market.
'We already had an energy specialist, Baringa, look into it all as well as our own energy experts and PwC who looked at the forecast. It was shown that after five years, once the loan was paid off, Victory would bring in Â£2m a year to the council.'
PwC's findingsÂ will be taken to aÂ full council meeting.'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹'‹