News Worms
News Worms

United Kingdom govt says concerned about Centrica's planned power price rise

United Kingdom govt says concerned about Centrica's planned power price rise

Worked at BP for 29 years before stepping down from the board in 2014 to become CEO of British Gas owner Centrica.

BG is the latest supplier to announce their price hike of 12.5% for electricity, meaning an average rise of 7.5% for dual fuel, variable rate customers - effectively adding £235.6 million to its customers' energy bills.

Such announcements are highly sensitive because they can affect share prices.

The increase in the price of electricity is the first since November 2013.

Centrica's chief executive, Ian Conn, who received a 40 per cent pay rise in 2016 taking the total to £4.15 million, recently hinted price rises were on the way and suggested the company's costs have risen.

"The fact of modern Britain is that people simply can not live without energy yet they are being squeezed by both rising prices as well as flat or falling wages".

Research suggests that British Gas should be cutting bills, not putting them up, as the wholesale cost of energy has been falling.

Centrica took a 224-million pound post-tax impairment charge in the first half of this year related to the Rough field.

The FTSE 100 company further said that British Gas will give a credit to protect more than 200,000 vulnerable customers from the increase.

The Department for Business, Energy and Industrial Strategy (BEIS) has condemned the move, expressing "concern" that the price rise "will hit many people already on poor-value tariffs".

"This rise reflects an underlying increase in policy and transmission costs. British Gas increase will cripple me".

And mounting utility bills combined with flatlining household incomes and poor building standards on insulation, mean the problem has been growing steadily in the United Kingdom for years.

The so called "big six" of the UK's largest energy suppliers have a strong hold over energy prices, and successive governments and parties have pledged to introduce some form of price controls in recent years and decades.

Shadow energy minister Alan Whitehead said: "On the face of it, it doesn't appear to be justifiable at all". If we attribute £9 of that to the increased costs of getting electricity to people's homes then that leaves £89.

Theresa May's government has watered down its general election vow for an energy price cap for 12 million families. This followed a government request to set out plans to help those placed on the poorest-value tariffs.

News of the price hike came as Centrica reported British Gas adjusted operating profits tumbled 23% year-on-year in the first six months of 2017 to £489m.

'We want to see rapid progress on this commitment and are ruling nothing out'.


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