UK energy companies get billions to take clients of failed rivals

A UK regulator has approved 1.8 billion pounds ($2.4 billion) of claims to compensate energy companies for taking on millions of customers left stranded as dozens of rival suppliers went bust.

About 24 household suppliers have collapsed since early August as wholesale gas prices soared and the energy regulator’s price cap limited the costs that could be passed on to consumers.

The claims granted by Ofgem relate mainly to the additional wholesale energy costs absorbed by companies that took on customers under its Supplier of Last Resort process. The largest single compensation of 681 million pounds went to Octopus Energy for taking on Avro Energy’s 580,000 customers, according to documents published on Wednesday.

British Gas Trading, the retail arm of Centrica Plc, was granted a claim of 361 million pounds for taking responsibility for about half a million customers from a number of smaller firms. Shell Energy Retail was awarded 362 million pounds.