LONDON (AP) – Britain’s business secretary will hold emergency talks with industry leaders and consumer groups on Monday as the UK government seeks ways to support energy companies threatened by soaring gas prices natural.
Kwasi Kwarteng said on Sunday evening that Britain’s energy regulator will ensure gas and electricity continue to flow to customers if their energy supplier fails. If necessary, the government will appoint a special administrator to ensure supply until a company can be rescued or its customers are transferred to new suppliers, he said.
Four small energy companies have gone bankrupt in recent weeks due to sudden increases in gas prices around the world. Wholesale gas prices in Britain have tripled this year as the global economic recovery from the COVID-19 pandemic increases demand at the same time as storms in the United States and planned maintenance have reduced supplies.
British authorities point out that Britain’s domestic gas production coupled with imports from Norway means there are enough supplies to meet the country’s energy needs.
“Energy security will always be our top priority,” Kwarteng tweeted Sunday. “I am convinced that security of supply can be maintained in a wide range of scenarios.”
The Times of London reported that the cost of supporting the industry could ultimately cost taxpayers billions of pounds.
One option offered by some large energy companies is to transfer customers of failing suppliers to a temporary state-owned company that could be sold at a later date, UK media reported. This proposal would be similar to the so-called bad banks that were used to house the high-risk assets of some lenders during the global financial crisis.
Another option is for the government to provide loan guarantees to large energy suppliers to absorb customers of bankrupt companies. The costs of such a program would ultimately be recovered through higher energy bills.
“It’s really a function of the wake-up call of the global economy after COVID,” Prime Minister Boris Johnson said upon arriving in New York on Sunday. “We have to try to fix it as fast as possible, make sure we have the supplies we want, make sure we don’t allow the businesses we rely on to go bankrupt. We will have to do whatever we can.
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