January 24, 2022

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Boris Johnson’s Other Disaster – WSJ

2 min read

A measurement dial for electricity usage outside a customer’s home in Danbury, U.K., on Thursday, Oct. 21, 2021.



Photo:

Chris Ratcliffe/Bloomberg News

Boris Johnson

is fighting for political survival amid a scandal over parties during pandemic lockdowns in 2020. And if only that were the U.K. Prime Minister’s only problem. “Party-gate” is proving so damaging because the news has landed on an electorate already exasperated with Mr. Johnson over soaring energy costs.

The government estimates the average household’s energy bill rose 6% in 2021 for electricity and gas combined, to £1,339 ($1,837). That may conceal much bigger increases for some households. Some 25 suppliers have failed since August, pushing thousands of businesses and some two million domestic customers (8% of all households) to new suppliers potentially at higher rates.

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The cause of this fiasco is green-energy favoritism amid a global surge in fuel prices. Retail suppliers were unprepared for surging wholesale gas and electricity prices, thanks to a cap on household energy prices imposed by Mr. Johnson’s hapless predecessor

Theresa May.

That cap, which became Tory Party orthodoxy, prevented retailers from accruing higher profits when wholesale prices were lower to protect themselves from supply shocks. But it also offers little lasting protection for consumers. Rising wholesale prices could force regulators to increase the price cap by 50% at its six-monthly review in February.

Britons…



2022-01-14 18:38:00

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