Centrica shares plunged to their lowest level since 2003 as the UK government plans to publish a draft law as early as next week to cap household energy prices.
Shares in the UK’s biggest power and gas supplier to homes fell as much as 7.4% and SSE dropped as much as 5%. Utilities from Germany’s EON and Spain’s Iberdrola with operations in Britain also fell as Theresa May followed through on an election promise to cap charges in what she called UK’s “broken” energy market.
Ms May’s government will “bring an end to rip-off energy prices,” she told delegates at the Conservative Party’s annual conference in Manchester. “We will always take on monopolies and vested interests when they are holding people back,” she said.
The UK government and its biggest utilities have come under increasing pressure from the Labour Party, other lawmakers and consumer groups to revamp how the retail market works and to curb prices for the most vulnerable consumers.
Centrica is the utility that is most exposed to the planned regulation, RBC said after the speech.
Details of the plan circulated by Ms May’s office after her speech suggested the measure is softer than her words suggested. The law will give regulator Ofgem the powers to set the cap, and the measure can only be temporary, according to the briefing.
The market is broken because it punishes loyal customers with higher prices and the most loyal are often those with lower incomes, the elderly, people with lower qualifications and people who rent their homes, she said in her speech.
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