Price tag put on energy supplier collapses: ‘every home to pay £120’!

The domino of energy firm failures has cost more than £3 billion, according to new analysis

Every household across the UK is predicted to see an extra £120 added to their annual energy bills, new research finds.

The wealth management group Investec estimates that millions of households would have to cover the cost of all the energy firm collapses.

Bulb was the biggest energy supplier that collapsed last week, leaving 1.7 million customers without a supplier. Two days later, it was confirmed that the company entered a special administration regime.

The report suggests that customers would have to bear a total cost of £3.2 billion created by bust gas and electricity providers.

In its report, Investec said: “The meltdown in the supply market is likely to see substantial additional costs land on every GB household, hardly welcome when fuel poverty is an issue, inflation is an issue and commodity costs look set to push energy bills up.”

Martin Young, an Investec Analyst added: “We ask Ofgem whether it is right that consumers ultimately bear this price and whether the system as structured created moral hazard.”

Last month, Chris O’Shea, Chief Executive of British Gas owner Centrica forecast that billpayers could face at least £100 in extra costs as a result of the failures in the energy market.

Responding to the latest Bulb collapse, Andy Prendergast, GMB National Secretary, said: “If the government ignored industry offers to help without costs to the public, it raises serious questions.

“We firmly believe energy is a crucial resource that should be supported by the public purse to ensure that it is paid for progressively. But this bailout seems like the latest in a long line of knee jerk reactions in response to a growing crisis.

“Customers and businesses need to be protected from the consequences of an arm’s length policy that have left us without sufficient gas storage to cope with price rises.”

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