OCTOPUS Energy wants to work with rival Centrica and market regulator Ofgem to protect households, as it continues to raise doubts over proposals to ringfence consumer credit balances.

The UK's fifth-largest supplier also repeated warnings that ringfencing the entirety of customer credit balances could add as much as £30 per year to household energy bills - which are already at record highs.

By contrast, Octopus argues its counter-proposals for a travel insurance model would only add £5 per year to household energy bills.

An Octopus spokesperson told City A.M.: "We're in an energy crisis and everyone should be focused on bringing bills down - so it seems crazy to propose a 'fix' that costs six times more than the problem, which is why Octopus urge the regulator and industry to find a better value solution. We'd love to work together with British Gas to find a better way."

Ringfencing refers to Ofgem proposals for energy firms to hold consumer credit balances in a special account, with the funds only spent on securing energy supplies rather than being used to fund commercial operations.

Octopus' call for unity reflects a change of tone in an escalating dispute between the two rival energy firms, which have been at loggerheads over ringfencing for several months.

Centrica, which owns British Gas, reignited calls for ringfencing last week, with the energy firm's boss Chris O'Shea warning that regulations around ringfencing had to evolve, or the industry risked another crisis.

He said: "Regulation on this needs to change or we run the risk of history repeating itself. Despite the many failures, wealthy private energy company owners are still using customer money as free working capital today. If they are successful, they become even wealthier, and if they lose, UK consumers picks up the tab."

Its own research, undertaken by consultancy experts Oxera, argued Octopus' proposals would "not be appropriate" for fixing the market.

British Gas is the UK's largest energy supplier, home to over nine million customers across the country.

It has been ringfencing customer credit balances as a matter of company policy since March earlier this year.

(c) 2022 City A.M., source Newspaper