U.K. Utility Octopus Energy Faces $134 Million Hit, FT Says

(Bloomberg) --

Octopus Energy Ltd. warned record energy prices will result in a 100 million-pound ($134 million) hit to the U.K. power supplier’s bottom line this financial year, according to a Financial Times report.

Soaring wholesale electricity and gas prices have put 25 U.K. utilities out of business in the last six months. A regulatory cap on the amounts suppliers can charge consumers is, so far, shielding British households from the worst of the surging costs. But the current cap is expiring, and regulator Ofgem is due to announce a higher limit in February that will hit bills for about 22 million customers in April.

Octopus, Britain’s fifth-biggest domestic power supplier, told customers earlier this week the looming increase in household bills could be blunted by 80% if the British government allows producers to spread ballooning costs over a longer period. 

Prime Minister Boris Johnson’s government is resurrecting a proposal to eliminate the value-added tax from energy bills as ministers consider ways to alleviate the growing cost-of-living crisis in Britain.

Read more: 

• U.K. Rekindles Option to Cut VAT From Soaring Energy Bills
• Price Strain Could Take Out More U.K. Energy Firms, Utilita Says

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