Grant Shapps is going through recent calls to overtake the power regulator’s powers amid rising fears for hospitality companies’ skill to resist hovering energy prices.
Sky News has seen a letter from Kate Nicholls, chief govt of UK Hospitality, to the power secretary wherein she calls for that Ofgem be allowed to deal with suppliers’ dealing with of enterprise prospects’ ancillary power prices.
The letter is the most recent in a string of warnings from the commerce physique about its members’ battle to take care of the impression of upper power costs.
The authorities has pledged to increase monetary help to firms in energy-intensive industries comparable to manufacturing, however has left these in consumer-facing sectors like retail and hospitality going through renewed uncertainty.
“We…have concerns about the extent of Ofgem’s powers and their ability to act at the pace necessary to provide the support businesses require,” Ms Nicholls wrote.
“In particular we need to see Ofgem take action on non-commodity, service and access charges as well as security deposits and terms of supply which had the potential to undermine Government support.”
She warned Mr Shapps that many firms wouldn’t really feel the advantage of falling wholesale power costs for one more six months, and reminded him that just about half of hospitality companies had fastened their power contracts at excessive costs in the course of the second half of final yr.
“Due to a severe lack of competition in the market most hospitality businesses were forced to accept very high prices fixed for at least a year,” the letter mentioned.
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“Consequently, half the businesses in our sector will be locked in at extortionate prices as energy support is significantly reduced from April.
“This might have a doubtlessly terminal impression on 1000’s of companies which might be merely unable to afford their payments.”
Jeremy Hunt, the chancellor, is anticipated to set out additional particulars of power help on this month’s Budget assertion.
Source: information.sky.com”