GY companies are in advanced talks with the government to delay the start of a costly energy-saving scheme, as they argue that implementing it too quickly will cause customers’ bills to rise.
A spokesperson from SSE told City A.M. yesterday that the big six energy supplier thinks an 18-month delay would be sensible to avoid a steep price increase.
British Gas owner Centrica is also requesting more time to meet the targets to avoid passing costs on to consumers, according to the Daily Telegraph.
The Energy Companies Obligation (ECO) scheme was established in January 2013 and mandates companies to install a target number of energy-saving measures in customers’ homes by March 2015, or face hefty fines.
It is understood that the government is open to the industry’s requests to extend the scheme.
Opposition leader Ed Miliband’s recent attempt to woo voters with a pledge to freeze energy bills until 2017 has piled extra pressure on the Coalition to keep bills low, so an extension of the deadline until after election day could be an attractive option.
Low take-up of the Green Deal – the government financing scheme for people who wish to install energy-saving measures in their homes – has also hindered the ECO scheme by not absorbing the costs as much as previously anticipated, said the SSE spokesperson.
Labour’s proposal to freeze gas and electricity bills if elected has been lambasted by the energy industry and business groups.
There are fears that price caps would discourage much-needed investment in energy infrastructure, forecast to cost £110bn over the next 10 years.
Miliband’s speech wiped almost £3bn off the value of British firms SSE and Centrica last week.
The other big six energy companies were not available for comment yesterday.