U.K. Energy Market Failures Will Cost Every Single Household £100, Centrica CEO Says
U.K. Energy Market Failures Will Cost Every Single Household £100, Centrica CEO Says
(Bloomberg) -- The crisis in the U.K. energy retail market will add about 100 pounds ($138) to the bill of every home, Centrica Plc Chief Executive Officer Chris O’Shea said Tuesday.
Surging gas and power prices in the country forced 14 suppliers, serving more than 2 million customers, out of business since August. When new suppliers take on those accounts, some of the costs are spread around to everyone. The extra 100 pounds that consumers now pay could double as more suppliers go out of business, O’Shea said.
“There’s a systemic risk in terms of participation in the energy retail market,” O’Shea said at a meeting of the Industry and Regulators Committee at the House of Lords.
Centrica’s British Gas business, one of the biggest energy suppliers in the U.K., has added thousands of those stranded customers.
Britain has seen a surge in new suppliers in recent years. But with rising costs for energy and prices capped by regulators, that’s left many suppliers with no choice but to close shop.
The series of failures was foreseeable and should spur new rules, O’Shea said. Regulators should make sure suppliers have adequate capital, manage risk and protect customers’ deposits.
There also should be more accountability for those suppliers that already have gone out of business. Centrica wrote to the government’s insolvency service requesting an investigation into every case and asking that directors of those companies be held responsible.
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