Wednesday, 2 August 2017

Energy supplier Utilita defies price cap with £120m sale

Britain's biggest independent pay-as-you-go energy supplier is poised to shrug off a price cap imposed by the industry regulator as it plots a £120m sale to new investors.
Sky News has learnt that Utilita Energy is in advanced talks with at least two prospective buyers, with a deal expected to be struck within weeks.

Details of the sale, on which Utilita is being advised by PricewaterhouseCoopers, have emerged 24 hours after energy prices were thrust back into the spotlight by British Gas's decision to increase electricity prices by 12.5% from next month.

The Government was forced to defend the absence of a broader price cap from the Queen's Speech despite its appearance in the Conservatives' election manifesto, but indicated yesterday that a move to legislate against spiralling energy prices could still be on its agenda.

Utilita has already been subject to a price cap since April, as 99% of its 545,000 domestic customers are on pay-as-you-go tariffs.

Ofgem, the industry watchdog, said in a letter to suppliers unveiling the cap that competition authorities had "found that pre-payment customers have suffered particularly high levels of detriment".

"These customers have not been able to benefit from competitive prices in the same way as other customers, and unlike for other customers, where prepayment customers pay too high a price, the detriment may be felt in abruptly curtailed consumption," Ofgem said.

SKY      News.