Gas customers ‘to foot £3bn bill’

GAS customers will be asked to cover up to £3billion lost because of companies forced to fold during the supply crisis, a Scots-based firm has warned.

The price of gas is at a record high as the world economy recovers after lockdown, but firms have gone under because the energy price cap for customers means they are paying more than they can charge.

Paul Richards, chief executive of Together Energy, said his Clydebank-based company is losing money and warned the price cap is ‘not fit for purpose’.

He added: ‘The price cap as a mechanism is not fit for industry, nor is it fit for customers. When the converse situation arises and the wholesale price starts to drop sharply, the price passed through to customers in April might feel like a very, very poor deal, whereas at the moment the price cap feels like a price that is too good to be true.

‘I think we are looking at somewhere between £1billion and £3billion in costs that are going to be spread back across business and households.’

Householders have been warned to expect increasing bills when the energy price cap – at present £1,277 – is reviewed in April.

It was reported yesterday that the UK Government will commit to cut the price of electricity and impose a levy on gas bills, likely to start in 2023, which could cost households an extra £170 a year. Before then, however, ministers must introduce a package of winter measures to ease the crisis, according to the Energy Intensive Users Group.

The group’s chairman, Richard Leese, told BBC Breakfast cost containment measures should be the first priority and added: ‘Our second measure is to look at UK network costs. The third is to look at emergency measures, should any of our energy-intensive plants need to shut down rapidly.’

Suggesting reforms including inspecting the cap four times a year, Utilita Energy non-executive chairman Derek Lickorish said: ‘The Government has to look at means by which they can support not only energy suppliers but also big industry.’