One of the UK’s leading energy bosses has urged the government to offer more help to the poorest families facing unaffordable increases in energy prices.
EON UK’s chief executive Michael Lewis told Channel 4 further intervention was needed ahead of winter, with energy bills expect to rise above £3,000 per year this October.
Lewis said: “Let’s be very clear, the kind of increases we’re seeing now are unprecedented in my 30 years in the energy industry, I’ve never seen anything like it. And I think we’re going to have to see more government intervention to help customers ride through this extraordinary peak in wholesale prices.”
He also criticised Ofgem for failing to scrutinise newer entrants into the energy market, describing the market crisis as a “failure in regulation.”
Over the past 12 months, 30 suppliers have collapsed, suffering from the lethal combination of a fixed price cap, soaring wholesale costs, and insufficient hedging.
The market has dipped from a peak of 80 suppliers in 2018 to less than 20 in the domestic consumer sector.
The energy boss said: “We don’t think that there were enough financial controls on new entrants. We don’t think that their risk-taking behaviour was properly managed. And indeed, they were effectively gambling with customers’ money and with our customers’ money because our customers have ended up having to pay for their losses as a result of the supplement that’s now in energy bills.”
He also welcomed today’s select committee report on energy bills, and proposals to fix the market with more stringent finanaicla rules.
Lewis said: “We have a number of proposals on the table from Ofgem and from today’s select committee which point to where the market should go, namely much tighter financial controls on new entrants, much better risk management, ring fencing with customer credit balances, and a move away from an absolute price cap to a relative price cap with a social tariff, to make sure we protect vulnerable customers.”