Centrica to legally challenge energy price cap

Centrica to legally challenge energy price cap

Centrica has announced plans to launch a legal challenge against Ofgem over the energy price cap that is to be introduced to some energy bills next month.

The company that owns British Gas confirmed it was seeking judicial review of the way in which the energy regulator calculated the cap in relation to wholesale cost of energy.

It said: “As we have previously said, we do not believe that a price cap will benefit customers but we want to ensure that there is a transparent and rigorous regulatory process to deliver a price cap that allows suppliers, as a minimum, to continue to operate to meet the requirements of all customers.”

The cap was finalised in November, but the level can be changed based on fluctuations of wholesale cost and is set to be reviewed in February.

Wholesale costs contribute around half a typical energy bill and increase drastically this year, which led to some supplies going out of business.

The cap will be in place until 2020 and is expected to save consumers an average of £76 a year.

Suppliers have described it as anti-competitive and Centrica has said it will cost them £70 million in the first quarter of next year.

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