THE boss of one of Britain’s biggest energy firms has warned that households face 18 months of rising costs.
Energy bills have already risen by hundreds of pounds after a spike in the wholesale cost of gas.
1
Scottish Power boss Keith Anderson has said that the ongoing crisis could lead to bills continuing to rise throughout next year and into 2023.
He said the crisis could leave just five or six energy suppliers in business.
More than 12 companies have already ceased trading in recent weeks because of surging costs.
He said: “The impact of that, if nothing else changes between now and then, we think you could see by that time the market return to five or six companies, and you could go all the way back to a new version of the Big Six.”
“I don’t think that’s in the industry’s interest, it’s not in customers’ interest, and it’s not in the interest of the regulator either.”
Mr Anderson also called for the cap on prices that limits bills for customers to be scrapped.
He said: “Our view would be the price cap should be changed at least quarterly, perhaps more frequently depending on the market conditions.
“And the price cap has to catch up with the reality of the cost, and the supply cost of gas and electricity, more quickly than it currently does.”
The cap increased by £139 to £1,277 at the start of October and could rise again next April.
The cap is adjusted twice a year to reflect changes in the market.
Fixed tariffs are normally less than the cap, but rising wholesale energy costs have sent prices soaring and they are now hundreds of pounds higher.
It means most billpayers are likely to be in the unusual position of being better off staying on the SVR rather than switching.
For energy companies, it means that the cost of supplying energy is more than they can charge customers, causing many smaller suppliers to collapse.
Regulator Ofgem said: “Ofgem is working closely with Government and industry to ensure that customers remain protected. We have robust systems in place to ensure this.
“The price cap will remain in place this winter to protect millions of people from the sudden increases in global gas prices.
“We are also working with Government to ensure that we have a sustainable energy market that works for all customers.”
Martin Lewis explains why you need to take a screenshot of your energy bill NOW
We pay for your stories!
Do you have a story for The Sun Online Money team?
Email us at [email protected]
