So British Gas received significant negative publicity in response to the news that they were the last of the big suppliers to increase their domestic electricity charges, effective from September. Perhaps this was a little unfair, especially in light of the freeze that they put into place in December 2016.
This increase brings them in line with most other suppliers in the domestic market. However it is perhaps because they have such a significant share of the domestic market that they received such focus in the media. Especially given that wholesale electricity prices have fallen since the start of the year.
Iain Conn, Centrica’s CEO, sought to deflect criticism by making it clear that the increases were largely down to the impact of Government policy but despite this there was talk of price freeze legislation not being possible due to Brexit pressures.
The fact remains that perhaps the truth hurts. TEC members have seen significant increases in the non-commodity element of their electricity bills over recent years. It was only a matter of time before these costs increased, mainly to cover the cost of increasing support for renewable generation (Contracts for Difference) and keeping the lights on (Capacity Mechanism).
The domestic sector was always going to feel the impact of these charges eventually and there might be some sympathy for British Gas for the response from the media. Expectations are that the Government will continue to deflect attention onto the “greedy suppliers”. As accusations of the increase to the policy are well founded, while Labour party cries of foul might also be considered false as the very policy which is causing the increase was put together by them when in government.
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