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Energy companies need to explain themselves

Energy companies need to justify their inflation-busting price hikes in the face of a new report showing more than half of the UK’s poorest families went cold last winter, according to Energy Advice Line, the UK’s leading commercial electricity comparison service.

Blaming the increases on rising network and wholesale costs, as well as green levies, did not add up. Bosses from the UK’s Big Six energy providers were due to be grilled by MPs on the reasons for the price hikes. Four of the companies have announced rises in the average dual fuel bill: Scottish Power 7%, SSE 8.2%, British Gas 9.2% and npower 10.4%.

Energy company bosses will inevitably blame rising network and wholesale costs, and green levies, for the increases, but that argument doesn’t wash.

Consumers expect answers about the price rises…

Consumers expect MPs to tackle energy suppliers very heavily on this. OFGEM’s own data shows that wholesale costs have risen by 1.7% in a year but profits on household bills have almost doubled.

OFGEM says that increases in what energy companies pay for gas and electricity have added just £10 a year to household bills. Energy companies should be forced to explain why their profits added £50 to those same bills.

Explanations are required from four of the biggest energy companies, following their recent price rises for dual fuel

Suppliers enjoy extra profits while the consumer pays more…

It is a genuine scandal that suppliers enjoy these extra profits while many families are facing the choice of whether to eat or stay warm this winter. A recent Children’s Society report into child poverty found that over half of all children who say they are in poverty say they are living in homes that are too cold.

The charity says it is “disgraceful” that many families are facing unacceptable choices such as eating or heating.

Suppliers are not doing enough…

The Energy Advice Line remain unconvinced that commercial electricity suppliers are doing enough to help customers choose the cheapest energy tariff available to them. MPs need to get some answers from the Big Six when they grill them, but ultimately further finger pointing and throwing figures about will not ease the burden for consumers who can no longer afford to stay warm.

All stakeholders – consumers, suppliers, regulators, the government, and consumer organisations like ours – need to sit down to develop a strategic plan for the energy market with affordability at the heart. There are huge decisions to be made about the future of the UK’s energy but consumer interests seem to have been left out of the equation for too long.

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