Banning prepaid meters will push up electricity bills, says British Gas chief

Centrica CEO Chris O'Shea warned that the cost of unpaid bills needs to be covered by a wider customer base. Centrica

A ban on forced installation of prepaid meters will increase electricity bills for all households, said the owner of British Gas.

Chris O'Shea, chief executive of Centrica, said giving some customers more debt means energy companies will have to bill everyone else to compensate.

Under proposals Ofgem is considering to reduce the need for mandatory metering, suppliers could be allowed to charge all households extra to cover the cost of bad debts.

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But Mr. O' Shi warned that «if bad debts rise because of this, Ofgem will have to increase the price» that suppliers charge, according to the Financial Times.

He added: «Ultimately, if you have people in categories where you can't install a prepayment meter, then the population as a whole pays for their energy.»

British Gas has come under fire. after it was discovered that contractors acting on his behalf were breaking into the homes of vulnerable clients to install prepaid meters.

Prepaid meters can be enforced as a last resort if a consumer cannot agree repayment terms with their energy supplier.

An internal investigation by British Gas found that there were at least 13 instances where Arvato, the contractor, went ahead with a forced fit without proper explanation of how client vulnerabilities were taken into account.

Mr O'Shea's comments come after Centrica forecast profits of up to £1.4bn by 2023 as the energy giant prepares to offset hundreds of millions of dollars in spending through consumer bills.

Questions and answers about electricity bills

The FTSE 100 giant on Tuesday said it expects this year's adjusted earnings to be «near the upper bound» of what analysts are predicting, ranging from £967m to £1.35bn.

He pointed to «significantly higher» profits from his retail division than in previous years due to the so-called premiums in Ofgem's upper price range, which will allow companies to charge higher fees and recoup unavoidable costs. they have incurred in recent years.

Martin Young, an analyst at Investec, said this covered one-off costs related to Covid, the energy crisis and the switch of the price cap from semi-annual to quarterly updates.

For example, some vendors have taken over the customers of failed competitors.

He added: “What you have received is a lot of costs that were incurred in previous periods, and are now recovering . And from what Centrica released this morning, that's a potentially high number… I'd definitely expect triple-digit millions.»