No, the energy companies borrow the money, not the customers.
This is part of the email they sent:
There has been a lot of discussion about what should be done to protect people from these rises. There are several options being considered by Ofgem, government and the energy industry:
- Spreading the cost over several years
- Removing VAT and environmental levies from energy bills
- Extending the warm home discount to more customers
All of them can help, but the most impactful of these options is spreading the cost over several years, because it’s the only one big enough to make a real difference to all customers.
It’s impossible to know when wholesale prices will return to normal levels, but the issues leading to the rise are mostly temporary.
Spreading the cost of this sudden spike over several years will allow us to make the imminent April rise much, much smaller — more like £12 per month — and adjust prices to gradually cover the cost over time.
And with the benefit of time, the gradual rises are likely to coincide with falling wholesale prices, making the effective increase much smaller, and eventually dropping below current prices.
Should there turn out to be structural issues with our energy market that mean wholesale prices stay high or push even higher, then we will have greater time to deal with these at a national and international level, rather than just passing the bill straight through to households and forcing many into fuel poverty overnight.
Private funding can be found for deferring these costs which means we may be able to do it without Treasury funding (of course that may be an option too).