Energy firm boss says crisis is ‘bringing industry flaws to the surface’

The chief executive of one of the UK’s top 10 energy providers said the current energy crisis is “bringing flaws to the surface” in the energy supply industry.

The soaring price of wholesale gas has seen seven firms collapse since August and led to a warning from the Government to prepare for the worst.

Bill Bullen, the chief executive of Utilita Energy, one of the UK’s top 10 energy providers, said many companies are collapsing because they took advantage of low prices to offer customers cheap deals in the past without preparing for gas price surges.

He told BBC Breakfast: “We have always forward hedged that position so we feel quite confident about the coming winter.

“I think there is a number of companies that didn’t do that, maybe seeking to use lower spot prices to offer customers really cheap deals but when spot markets go up and put the industry under some stress, those things do come to an end.

“We can be confident about the winter because we have already forward hedged. I mean, obviously the industry generally is going to be under stress if we have a particularly cold winter – that is going to cause further problems – but properly financially sustainably run businesses, prudent businesses, will have forward hedged their position for this winter and we feel confident about that.”

He also wanted to make sure any Government assistance helped maintain diversity in the market for customers.

Mr Bullen added: “If there is going to be a Government support package to accept new customers from failed supply businesses … we would like to be included in that and look at what that funding package means.

“We want to see, basically, a fair, level playing field between companies like mine and maybe some of the bigger companies.”

He continued: “Because the industry is under stress at the moment it is bringing flaws to the surface that otherwise would have gone un-noticed.

“But there is a problem with the way price capping works, for example, and I would say the problem is deeper than that.

“For a long time we have been far too focused on price and trying to trim maybe one or 2% off the price, which I know is important, but if you trim 10% or 20% or 30% off the consumption – that’s a much bigger saving for the consumer and I think that’s where we would like to see Government policy move, because that’s the way to tackle other issues like climate change, like fuel poverty, as well as of course energy security which is the key problem we’ve got now.

“It’s this dependency on imported kilowatt hours and imported hydrocarbons that’s kind of got us into the situation we’re in now.

“There is a global shortage of gas, this isn’t a problem that is just about the UK, but if we’re tackling energy consumption, not just consumers but businesses as well, that would be a big step towards tackling some of the other issues we’ve got as a country.

“And we want to get on the net zero journey, we want to tackle fuel poverty and tackling consumption, reducing consumption, is the way to go about doing that.”