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Financial assistance being sought by the energy sector from the government poses the risk of some struggling suppliers “misusing funds”, Good Energy founder Juliet Davenport has told Utility Week.
Talks are ongoing between the Department for Business, Energy and Industrial Strategy (BEIS) and trade body and Energy UK over what assistance suppliers can be given to help mitigate the effects of coronavirus. Specifically, there are major concerns over consumers being unable to pay bills, especially business customers.
However, Davenport is concerned that an adverse effect of any help could be that struggling suppliers see any assistance from BEIS to help vulnerable customers as “free cash”.
While Davenport said she was concerned about the way funds could be used, she also warned of the importance of ensuring there is not a spate of supplier failures during the pandemic.
She said: “I think right now, seeing a bunch of supplier failures is not ideal. It’s frustrating sometimes when we see companies that are not being run efficiently, where they take risks they shouldn’t be taking.
“And we hope that they should be responsibly run but our concern is where we’re seeing people cut their prices right to the bone but then expecting government to bail out their customers if they renege on any debt.
“As utilities, it is our job right now to be as responsible as we can and I think if we do that, then we are in a good place for government to support customers through loans.”
Davenport added: “It is a risk that a lot of the measures to support businesses which are genuinely being run very well during a period where they really can’t do anything else, are misused.
“There will be some businesses that were not doing well already and coronavirus is just giving them an opportunity to get some free cash. That’s probably a little bit harsh but I would say there would be some unscrupulous businesses out there definitely.”
The full interview with Juliet Davenport will be available online next week.
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