The CEO of SSE has warned a proposed energy price cap in the UK must be carefully planned out.
Alistair Phillips-Davies, from the Big Six utility, warned regulator Ofgem that a price cap for standard tariffs must be based on robust methodology if it is to avoid causing serious consequences for the retail market.
Speaking to the press, he said the success of the Conservative election pledge would depend on how well the complexities, risks and costs of supplying energy were assessed and accounted for.
He advised the price must be set objectively, be regularly reviewed and be based on a “full understanding of market realities”.
He said: “If Ofgem can design any cap in a way that doesn’t fundamentally undermine the progress that’s been made in the market then that may be an outcome that can work. But that’s a big ‘if’.”
Prime Minister Theresa May has said 17 million households will benefit from the price cap on expensive standard variable tariffs.
A consumer group says tackling rising energy prices should be one of the next government’s main priorities.