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Highlights
- Ofgem preponed its price cap decision announcement at 11 am today instead of an earlier date of 7 February.
- The move comes amid reports that Rishi Sunak might introduce a scheme to cut household energy bills by around £200.
The UK’s energy regulator Ofgem will announce its new energy price cap today (Thursday, 3 February), earlier than previously anticipated. The body was earlier expected to make an announcement regarding a potential price cap increase next Monday, 7 February.
Experts estimate that the new price cap will jump by nearly 50 per cent to £2,000 per annum. Comparatively, the average price cap this winter season had stood at £1,277 per year. The new price cap is expected to come into effect from 1 April.
There are reports that Chancellor Rishi Sunak could introduce a scheme to cut household energy bills by around £200. Moreover, according to media reports, ministers are also set to unveil a multi-billion pound loan package for energy providers in the country.
Let us take a look at 2 FTSE 250 index listed energy utility stocks and explore their investment prospects:
- Drax Group PLC (LON: DRX)
Drax Group is a power generation company.
The company recently appointed accounting firm PricewaterhouseCoopers as an external auditor for the group starting from FY 2024. The decision was taken following a competitive audit tender process.
According to the group’s latest trading update, Drax expects its adjusted FY 2021 earnings before interest, tax, depreciation, and amortization (EBITDA) to be at the higher end of its current expectations (subject to certain conditions)
Image source: EODHD/Others
Drax’s shares closed at GBX 608.00 on 2 February 2022. Meanwhile, the FTSE 250 index closed at 22,249.40.
The company’s market cap was at £2,427.30 million, and it has a one-year return of 59.33 per cent as of date.
- Centrica PLC (LON: CNA)
Centrica is a UK-based energy company. British Gas, which is owned by Centrica, stated it would take over the customers of recently collapsed energy provider Together Energy, as part of Ofgem’s SOLR (supplier of last resort process)
Together Energy, along with its subsidiary Bristol Energy, supplied energy to around 176,000 domestic customers. Together Energy ceased trading on 18 January.
British Gas has taken over 700,000 customers since 2021 from energy providers who have gone bust (this figure includes Together’s customers as well).
Image source: EODHD/Others
Centrica’s shares closed at GBX 76.66, up by 3.1 per cent on 2 February 2022. The company’s market cap was at £4,508.75 million and had a one-year return of 49.03 per cent as of date.
