Collapses ‘will add £100 to bills of every UK household’

Centrica Chief questioned whether it is fair for customers of surviving companies to pay for customers of failed firms

An extra £100 a year will be added to the energy bills of every home as a result of the numerous collapses in the domestic market.

That’s the suggestion from Centrica Chief Executive Officer Chris O’Shea who spoke to ITV News about the current crisis due to the soaring energy costs: “The cost of these failures are socialised across the entire customer base of the UK.

“It is very hard to argue it is fair that customers of companies like British Gas are subsidising customers of the companies that have failed. The regulations that we have got today, I don’t think any party would argue that are working as they have been intended.”

Mr O’Shea said collapses could add £100 a year to every customer bill in the next 18 months.

That is coming from an estimated overall cost of the failures reaching £2.5 billion according to Centrica.

Skyrocketing gas prices led 22 companies to collapse since August, leaving nearly 2.5 million customers to be taken on by other energy firms.

Companies that take customers of failed suppliers guarantee credit balances and supplies.

The Suppliers of Last Resort can recoup costs from an industry fund which is paid by all customers’ bills.

Last month, the Centrica Chief spoke to the House of Lords Industry and Regulators Committee about the current conditions of the energy market.

He said: “My personal view is that if we put these costs on bills on a flat rate then that will not achieve what we want to achieve. That will not achieve a just transition. It will ensure that people are left behind.”

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