Octopus Energy has said that it could have made a profit last year, but chose to keep bills down for customers, as it also got more than £600 million to take on the customers of a failed supplier.
The energy supplier told the PA news agency that it had kept bills around £50 lower for the average household than the price it is allowed to charge under Ofgem rules.
This cost the business more than £150 million in lost revenue, pushing it into a loss for the year.
The business said that operating loss was £141 million in the year to the end of April 2022, while pre-tax loss was a little under £166 million, up from £75 million the year before.
“We invested heavily in holding customer prices down,” finance boss Stuart Jackson said.
“So we held our standard variable tariff meaningfully below the price cap through that period and effectively provided some shielding to customers against the rising wholesale cost,
“(The loss is) more than explained by the pricing decisions we’ve made, and the high proportion of people that were able to come on to the standard variable tariff.”
Mr Jackson said the business could afford this because it has lower running costs in part due to its technology investments.
The business increased the number of customers it served on April 30, 2022, by 60% to around 3.4 million, it revealed. A lot of these came from Avro Energy.
Avro had around 580,000 customers when it went out of business in the autumn of 2021. Octopus said that it would be the new home for these customers.
Octopus revealed that it had gained around £625 million from the Avro levy.
Since the end of the company’s financial year, in April 2022, Octopus has added millions more customers, including by taking over Bulb, a major energy supplier which had collapsed into special administration.
Chief executive Greg Jackson said: “It has never been more important to build a better, fairer energy system for all and Octopus Energy Group is truly leading the way.
“We could have made a profit but now’s not the time – instead we chose to absorb £150 million of escalating costs on behalf of customers through prices and support funds, debt forgiveness and increased service.”
