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UK considering how to tackle household energy prices
June 21, 2017 / 11:00 AM / 6 months ago

UK considering how to tackle household energy prices

LONDON (Reuters) - Prime Minister Theresa May’s government said it remained committed to helping consumers hit by the most expensive energy tariffs, but had not decided how to intervene in the market and did not mention a price cap when setting out policy objectives.

A gas cooker is seen in Boroughbridge, northern England in this November 13, 2012 file photograph. REUTERS/Nigel Roddis/Files

May previously said she would tackle high household energy prices if she was re-elected by introducing a cap on standard variable tariffs that could affect about 17 million families.

“We have committed to extending the price protection currently in place for some vulnerable energy consumers to more of those on the poorest value tariffs,” the government said on Wednesday, as it set out its policy plan.

Britain’s Secretary of State for Energy, Greg Clark, told energy regulator Ofgem in a written letter seen by Reuters to “proceed without delay” and to advise him on what it intends to do regarding helping customers on the poorest value tariffs.

Ofgem, which in theory has the power to impose a cap on energy prices, said it would shortly be setting out the work it has underway.

“We share the government’s concern that the energy market needs to work better for all consumers and that energy companies need to do more to help loyal consumers get a better deal,” a spokesman said.

Clark said Ofgem’s response would inform the government’s decisions on tackling the energy tariff issue.

However, Britain’s energy retailers took the government’s announcement as a signal against a market-wide price cap.

“(The government) may end up intervening to make sure that unfair practices are remediated but they have removed the manifesto promise and language around capping prices,” Centrica Chief Executive Iain Conn told journalists on Wednesday.

Analysts previously said the government would likely decide against imposing a blanket cap on energy prices in favour of a curb on prices for the most vulnerable customers.

Shares in Centrica (CNA.L), which through British Gas is the largest energy supplier in Britain, were up around 2 percent after the company announced the disposal of two gas plants.

However, shares remain around 11 percent lower than last October, when May first suggested possible market intervention.

Shares in SSE (SSE.L), Britain’s second largest supplier were flat, but are down around 7 pct from last October.

Reporting by Susanna Twidale, Karolin Schaps and Kate Holton; editing by Guy Faulconbridge and David Evans

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