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Energy industry
British Gas owner says rivals blocking plans to protect customer deposits
Centrica accuses two big suppliers of resisting proposals in wake of collapse of scores of energy firms
Alex Lawson Energy correspondent
Fri 10 Jun 2022 13.46 EDT
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The British Gas owner, Centrica, has accused rivals of blocking plans to protect customer deposits in response to the collapse of scores of energy firms.
Centrica has accused two big suppliers – understood to be Ovo Energy and Octopus Energy – of resisting the proposals to ringfence deposits.
More than 30 energy suppliers have gone bust since the start of last year as a sharp rise in wholesale energy costs triggered widespread losses.
One of the biggest suppliers to collapse was Bulb. Octopus has made a last-minute entry into the three-way race to buy the supplier, which is in a special government-run administration, the Financial Times reported on Friday. Centrica and the Abu Dhabi energy firm Masdar are also reportedly part of a bidding war. The government has set a deadline of 30 June for bids.
Rising cost of living a worry for 77% of adults in Great Britain, says ONS
Administrators were unable to recover £400m of customer deposits after suppliers went bust in 2021, which has pushed up standing charges for consumers to compensate for the lost funds.
Customers typically overpay for their energy use in the summer months and then that credit is used over the winter, to keep direct debits consistent throughout the year.
The energy regulator, Ofgem, has proposed rules that would require energy suppliers to place customer funds in a separate account, ensuring any overpaid credit would be preserved in the event of a collapse. It has consulted on the issue and is expected to publish an update in the coming weeks.
However, Centrica is concerned that the proposals may not be adopted quickly or in full. In a letter to the industry body Energy UK, seen by the Guardian, the Centrica group general counsel, Raj Roy, said he was disappointed with EUK’s “lukewarm” response to the proposals.
Roy said: “The justifications and motivations for the positions being advanced by two major suppliers, in particular, objecting to Ofgem’s proposals are, on any analysis, simply not credible and not compatible with a sector that must act in the interests of consumers.
“The inescapable and adverse inference that we draw from the stance of these suppliers is that they are using customer credit balances to fund their wider commercial operations.”
Since 2019, the largest UK banks have been required to separate their core retail banking divisions from their investment banking arms in an effort to protect consumers. Advocates of similar plans in the energy industry hope consumers would
British Gas owner says rivals blocking plans to protect customer deposits
Centrica accuses two big suppliers of resisting proposals in wake of collapse of scores of energy firms
Alex Lawson Energy correspondent
Fri 10 Jun 2022 13.46 EDT
Share on FacebookShare on TwitterShare via Email
They must be sitting on a third of the mc in cash now, easily pay a decent div.
What sort of divi do you think they will pay.
Will they pay a special and/or div this year.
Am I right in thinking this is now $44 oil.
To Halifax not bull.
I topped up earlier in the day @1.65.
Got to wonder why no buys from BOD.
Both buys that were worked throughout Friday!!!
Up 11,% today
Up 15 percent
Forgot to add another £10m of afren back costs as well.