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The Conservative Party’s energy price cap would hit the operating profits of the biggest utility companies to the tune of £1.2bn and potentially “push the industry to losses”, according to Moody’s, the credit ratings agency.

Both Centrica, the owner of British Gas, and SSE would be hit hardest by the measure, given they have a higher proportion of customers on the standard tariffs that Theresa May, the prime minister, is planning to target through the proposed cap.

Other “big six” utility companies, which are foreign-owned, would be less exposed given their UK units are just one part of their more geographically-diversified businesses, Moody’s says.

Based on the results of those big six utility companies that have already reported 2016 results, Moody’s estimates the biggest energy companies generated operating profits of just £47 per dual fuel customer last year, much less than the potential £100 saving from the cap that has been promised by the Tory party. Eon of Germany and EDF of France made losses on their UK customers last year. SSE is the only Big Six provider yet to publish its 2016 results.

Moody’s says a £100 reduction in the average standard variable tariff compared to November 2016 levels would “reduce the operating profits of the six largest suppliers by £1.2bn, compared to operating profits from residential energy supply of only £1bn in 2016″, unless they are able to offset the effects of the cap.

Its analysts added in a note published on Wednesday: “Reductions on this scale would, if not offset by cost savings or large increases in the suppliers’ cheaper tariffs, push the industry to losses and significantly reduce key credit metrics for the largest suppliers, Centrica and SSE.”

Iain Conn, the chief executive of Centrica, earlier this week tried to soothe investor concerns over the possible impact of a price cap, saying it had a “cash buffer” and could further cut costs or potentially reduce investment to try and mitigate the negative effects of the policy.

Copyright The Financial Times Limited 2018. All rights reserved.

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