British Gas owner says rivals blocking plans to protect customer deposits

theguardian.com:

The British Gas owner Centrica has accused rivals of blocking plans to protect customer deposits in response to the collapse of scores of energy firms.

Centrica has accused two big suppliers – understood to be Ovo Energy and Octopus Energy – of resisting the proposals to ringfence deposits.

More than 30 energy suppliers have gone bust since the start of last year as a sharp rise in wholesale energy costs triggered widespread losses.

Administrators were unable to recover £400m of customer deposits after suppliers went bust in 2021, which has pushed up standing charges for consumers to compensate for the lost funds.

Customers typically overpay for their energy use in the summer months and then that credit is used over the winter, to keep direct debits consistent throughout the year.

The energy regulator, Ofgem, has proposed rules that would require energy suppliers to place customer funds in a separate account, ensuring any overpaid credit would be preserved in the event of a collapse. It has consulted on the issue and is expected to publish an update in the coming weeks.

However, Centrica is concerned that the proposals may not be adopted quickly or in full. In a letter to the industry body Energy UK, seen by the Guardian, the Centrica group general counsel, Raj Roy, said he was disappointed with EUK’s “lukewarm” response to the proposals.

Roy said: “The justifications and motivations for the positions being advanced by two major suppliers, in particular, objecting to Ofgem’s proposals are, on any analysis, simply not credible and not compatible with a sector that must act in the interests of consumers.

“The inescapable and adverse inference that we draw from the stance of these suppliers is that they are using customer credit