Centrica
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| Centrica | |
 |
|
| Type | Public (LSE: CNA) |
|---|---|
| Founded | 17 February 1997 |
| Headquarters | Windsor, Berkshire, England |
| Key people | Roger Carr Chairman Sam Laidlaw CEO |
| Industry | Utilities |
| Revenue | £16,450 million GBP (2006) |
| Operating income | £1,442 million GBP (2006) |
| Net income | £-154 million GBP (2006) |
| Subsidiaries | See below |
| Website | www.centrica.com For consumers: www.house.co.uk |
Centrica plc (LSE: CNA) is a large multinational company, based in the United Kingdom but also with interests in North America and Europe. It is part of the FTSE 100 Index of companies.
Contents |
[edit] History
Centrica was created in 1997 when British Gas plc demerged into Centrica plc and BG plc (later BG Group plc). The demerger grouped British Gas's gas supply, services, retail businesses and gas production business of the Morecambe gas fields under Centrica. Centrica is the largest supplier of gas to domestic customers in the UK, and one of the largest suppliers of electricity, operating under the trading name "British Gas".
In 1999 Centrica acquired the AA for £1.1 billion. In 2004 the AA was sold for £1.75 billion to two European private equity firms, CVC and Permira. Centrica has also attempted to diversify by developing the Goldfish credit card (later sold to Lloyds TSB Bank then subsequently to Morgan Stanley Bank International Limited) and buying the Dyno franchise group (best known for its Dyno-Rod drains unblocking service).
[edit] Divisions
[edit] Europe
- Luminus (Belgium)
- Oxxio (Netherlands)
- Luseo Energia (Spain)
[edit] Centrica North America
- Direct Energy
- Direct Energy Business Services
- WTU Retail Energy
- CPL Retail Energy
[edit] United Kingdom
- Centrica Energy
- Gas fields
- Power stations
- British Gas Services
- British Gas Residential
- British Gas (England & Wales)
- Nwy Prydain (Wales)
- Scottish Gas
- Dyno-Rod
- British Gas Business
- Centrica Storage
- Rough gas storage facility
[edit] British Gas
Centrica plc, trading as British Gas (and as Scottish Gas in Scotland) is market leader in the supply of energy to UK households. In recent years the UK wholesale energy market has become more volatile, with increases in wholesale energy prices of over 70% since 2005. Consequently the core residential energy business of British Gas has been running at a loss of over £200m according to the results released by parent, Centrica plc. Also related to this market volatility, since the beginning of 2006 all major energy suppliers, including British Gas as well as Powergen, nPower, EDF Energy, Scottish Power/Manweb and Southern Electric have raised their prices [1].
To help to manage price volatility, Centrica announced a variety of investments in new sources of supply that may help wholesale prices to come down in the future. During 2005, the company estimated that nearly £600 million was spent on new gas, power and renewable energy assets, with a further £400 million committed to help import more gas into the country.[2] Since 40% of electricity is generated by gas-powered stations, this investment was predicted to reduce the cost of electricity. In parallel British Gas announced in July 2006 that they intend to improve customer service.
Meanwhile the EU is investigating alleged malpractice in the wholesale market for gas and electricity supply across Europe. Allegations include the suggestion that gas supplies to the UK are restricted, contributing to increases in the wholesale price of gas in the UK. The final conclusions of a competition inquiry into the EU energy sector will be published in December 2006.
The draft conclusions, published in February, confirmed fears by Brussels that former state monopolies in the major European markets (not UK) were keeping a stranglehold on home markets, allowing them to control pricing - against the interests of consumers. Competition commissioner Neelie Kroes criticised excessive concentration in what she said reflects the "old market structure of national or regional monopolies".[3]
In May 2006, Kroes showed real commitment to addressing the issues by launching a series of surprise inspections at the offices of major power utilities in Germany, Italy, France, Belgium and Austria on suspicion of antitrust practices and abuse of dominant market position in the gas sector (E.ON, RWE, Gaz de France, Distrigas, OMV were among the companies targeted). These investigations are now ongoing and do not come with a specific deadline, but in recent updates from Brussels Kroes has been highly critical of the lack of market conditions supporting competition [4] [5].
The wider European energy market has a direct influence on the operation of the UK market. This includes the sources of supply and the nature of competition. In contrast to the situation in Europe, the UK energy market is an open market in which British Gas competes with a variety of other suppliers - including Powergen and nPower which are subsidiaries of E.ON and RWE, respectively.
[edit] See also
[edit] References
- ^ "Energy customers flee price rises", BBC, July 4, 2006.
- ^ "Centrica signs Drax supply deal", BBC, April 11, 2006.
- ^ "Energy firms 'holding back gas'", BBC, Feb 16, 2006.
- ^ "Spanish energy tussle hots up", BBC, Aug 7, 2006.
- ^ "Centrica raps French gas merger", BBC, May 21, 2006.
[edit] External links
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