Founder of GB Energy Supply, which entered the market 12 months ago, Luke Watson, told Utility Week that challenges such as the expected costs of the smart meter rollout, changes from the CMA and an expected spike in wholesale prices in the near future posed a risk to new entrants.
“I think the challenge for independent suppliers will come when there is volatility in the wholesale market. That is when the hedging strategy comes into play, and we are very conscious of that because it is our biggest risk at the moment,” he said.
Watson also said that the supplier was monitoring wholesale prices three times a day, adding: “I could take a view now and say we are going to hedge our whole portfolio, block in that margin and not take any more sales on and that way you are completely bulletproof, but I don’t want to take that view because I want to continue to sell good value energy.”
Watson also criticised the CMA investigation and claimed that price comparison sites “seem to have done quite well out of it”.
“ don’t show us by default because we are not commission-paying. We are very much against price comparison sites and paying for commission, but 60 per cent of suppliers are not paying commission and are therefore not being shown by default,” he said.
The supplier said it expects to submit its responses to the CMA’s findings before the end of April this year, ahead of the final decisions which are due to be published in June.