British Gas Challenge Energy Price Cap
What will happen next?
The owner of British Gas, Centrica, has legally challenged the government’s energy price cap.
Centrica have said they will apply for a judicial review, asking how exactly Ofgem (the energy regulator) had calculated wholesale costs within the price cap.
Centrica did however make it clear that they did not intend to delay or defer the cap’s implementation. They commented, “Through this action Centrica has no intention to delay implementation of the cap, and does not expect the cap to be deferred in any way”.
Although the government has not yet commented on the challenge from Centrica, the energy minister, Claire Perry, has stated the following: “The government will strongly condemn any efforts to frustrate the process of putting the cap in place”.
We will have to wait to see the outcome of this challenge by Centrica.
Comment from Mark Todd, co-founder of comparison site energyhelpline.com:
“The price cap is set to severely squeeze the energy industry this winter.
The price cap value was much lower than some expected, and is putting many companies in trouble. So far eight suppliers have gone bankrupt this year, impacting around a million customers. More could follow, particularly if we get some cold weather and suppliers need to buy more energy to meet demand. Meanwhile, larger suppliers are preparing for severely impacted profits in January.
But the vice-like squeeze from the January price cap is expected only to be temporary, as it is forecast to rise by around £115 a year from April. However, for the energy companies it is more expensive to buy energy in the winter. This has raised eyebrows in the industry, and could be part of the reason for Centrica making this move.
Customers should remember that the cap guarantees you a mediocre deal, but the big savings are still in switching, which is quick and easy to do.”
You can compare and switch your energy HERE