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UK gas owner Centrica will voluntarily cap profits to cut energy bills

Britain’s biggest energy supplier, Centrica, plans to voluntarily cap its profits in a bid to cut household bills, The Guardian newspaper reported on Saturday, citing chief executive Chris O’Shea.

O’Shea said he wanted British Gas owner Centrica to become the first company to sign new, renegotiated contracts with the government for its power generation, the newspaper reported.

“We are prepared to offer our electricity generation and gas production in the North Sea and Irish Sea under this scheme to help reduce consumers’ energy bills and we hope that others will follow,” said O’Shea in response to a Reuters request for comment.

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He gave no further details and the Guardian said he declined to say what proportion of Centrica’s profits he was willing to give up.

Britain’s new Prime Minister Liz Truss has pledged to cap consumers’ energy bills for two years, a move she says would protect consumers and businesses.

Opposition parties have said she should impose a windfall tax on energy producers, but she rejected the idea, saying she would instead renegotiate some contracts with producers.

She didn’t give specific details on how it would work.

“Obviously, we are in this business to create value for all of our stakeholders, customers, country colleagues. But it’s not about maximizing profits this year; it’s about having a long-term sustainable business,” O’Shea said.

Centrica posted a huge increase in first-half profit, boosted by asset sales and soaring energy prices. Its adjusted operating profit for the first six months of 2022 rose to 1.34 billion pounds ($1.55 billion), from 262 million a year earlier.

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