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(Sharecast News) - Shares in UK utilities fell on Friday after the government said it could cut the link between electricity and gas prices.
Finance Minister Rachel Reeves said she and Energy Secretary Ed Miliband were examining ways to decouple the duo to stabilise prices as electricity becomes a larger part of the energy mix. More than 52% of Britain's electricity now comes from renewables with this number set to grow.
"At the moment, when gas prices are high, we end up paying more for our electricity, even though the cost of producing it doesn't change," she said in Washington during meetings of the IMF and World Bank.
"And so myself and Ed Miliband are now working to come up with a practical way that we can delink those prices."
"It is quite a big change but is absolutely the right thing to do, especially as electricity makes up an increasing part of our energy mix, and we hope, within the next sort of few days, weeks, to be able to give more details on what that looks like."
Shares in British Gas owner Centrica and SSE were both lower on the news.
Reporting by Frank Prenesti for Sharecast.com
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