UK’s Centrica to Stop Selling Energy to Its Largest Clients


Centrica Plc will stop selling power and natural gas to its biggest business customers as surging wholesale energy costs erode profit margins at the UK utility.

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Centrica Plc will stop selling power and natural gas to its biggest business customers as surging wholesale energy costs erode profit margins at the UK utility.

The company will only supply clients consuming up to 10 gigawatt-hours of electricity and 1 million therms of gas, according to a person familiar with the matter. That means gradually getting rid of about 200 customers and not taking any new businesses outside the criteria, the person said.

Wholesale gas costs have doubled so far this year as Russia’s war in Ukraine drives extreme market price swings. That makes trading on behalf of big customers more risky because more collateral is required to guarantee trades, tying up cash, while the chance of client default increases. 

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Centrica isn’t the only large supplier to reduce its exposure to industrial and commercial consumers. Scottish Power Ltd., an arm of Spain’s Iberdrola SA, said in March that it would gradually stop selling energy to businesses because of the market’s “unprecedented challenges.”

While Centrica’s Business Solutions division made a profit of £20 million ($24 million) in the first half after posting a loss last year, gains were hurt by higher bad-debt provisioning and increased balancing costs, the utility said in its latest earnings statement.

The unit currently has about 38,500 customers, and sold 11.8 terawatt-hours of power and gas in the six months to the end of June.  



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