The chief executive of British Gas, a major energy company, has criticized rival Octopus by suggesting that it should be prevented from acquiring new customers. Chris O’Shea expressed discontent with the regulatory body Ofgem for what he perceives as a lack of strictness in enforcing regulations aimed at reducing the risk of energy suppliers going bankrupt.
This criticism follows Octopus surpassing British Gas as the largest household energy provider in the UK just six months ago. O’Shea also condemned customers who do not pay their bills, stating that it unfairly burdens responsible customers.
The energy sector saw nearly 30 domestic suppliers collapse due to surging wholesale gas prices following Russia’s invasion of Ukraine in 2021. To address this, Ofgem implemented new financial safeguards in April to absorb market shocks effectively.
Despite Octopus Energy becoming the largest supplier, it, along with two other suppliers, failed to meet the financial requirements set by Ofgem at the time. British Gas, on the other hand, complied with the regulations by ring-fencing around £900 million of funds.
O’Shea urged Ofgem to be more proactive, emphasizing the importance of suppliers meeting capital requirements to prevent systemic failures. He suggested that companies failing to meet these standards should be barred from acquiring new customers. However, he clarified that he was unsure if Octopus Energy was among the non-compliant suppliers.
Octopus Energy has committed to meeting Ofgem’s requirements through an agreed plan. Notably, Ovo Energy, another major supplier, did not disclose its compliance status. Recent reports indicated that Octopus Energy had secured the top spot in the UK’s domestic energy market.
In response to O’Shea’s remarks, an Octopus Energy spokesperson criticized British Gas for prioritizing self-interest over customer care. They highlighted compliance with regulations and investments in technology, job creation, and innovation as factors driving their success.
Ofgem defended the increased financial resilience in the energy sector, emphasizing the importance of companies meeting capital targets and abiding by set restrictions. British Gas reported a slight increase in its customer base amid ongoing efforts to improve its services.
In previous instances, British Gas faced scrutiny for its debt collection methods, including reports of agents installing prepayment meters in homes of individuals behind on payments. This controversy coincided with a decline in profits for British Gas and Centrica due to reduced demand caused by warm weather.
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