Urgent review of rising energy prices is needed
- Published on Wednesday, 17 October 2012 10:58
- Posted by Scott Buckler
Which? is concerned that not enough is being done to help consumers keep their energy bills down and has called on the Prime Minister to conduct an urgent review of the energy market
One year ago today Which? hosted an Energy Summit with the government's Department of Energy and Climate Change (DECC), energy suppliers and other consumer groups, to discuss ways to help consumers tackle energy issues this winter.
In the last week British Gas, Scottish Power and Npower have all increased their customers' energy costs, and SSE has implemented its cost increase announced in the summer.
With the average energy bill already rising 13% since last year, consumers tell us that energy prices are one of their top financial concerns.
Energy companies hike prices
Little has been done since the summit to address our growing concerns and yet another series of energy price hikes will hit consumers this autumn and winter. We are now calling on the government to take immediate action.
Which? executive director, Richard Lloyd, has written to Prime Minister David Cameron to outline his concerns:
'We are calling on you to launch an urgent, expert, independent review into the rising cost of domestic energy bills and whether competition among energy suppliers can be made to work more effectively in the consumer interest.'
Keep energy prices in check
A number of companies have suggested their costs are the result of wholesale increases or government environmental schemes impacting on their costs. With a lack of transparency in the energy market it's virtually impossible to get accurate calculations of these costs:
'People are questioning whether they are paying a fair price for their gas and electricity. The energy companies blame wholesale price increases but even the regulator has found that prices don't fall when the wholesale price drops. The sector is dominated by a handful of big and powerful players who are seemingly unaffected by the normal competitive pressure of price and customer service.'
We have therefore called on a review of the reporting measures energy companies provide:
'We also believe a review must identify what reporting measures should be required of energy companies, relating to both the wholesale and retail markets and the costs of social and environmental policies, to increase transparency and give consumers confidence that everything possible is being done to keep energy prices in check.'
Energy market is broken
Ofgem's proposals to change the retail energy market, expected shortly, are necessary but not enough.
The review must also consider whether the regulator should now be required to better protect the majority of consumers on expensive 'standard' tariffs by introducing a fair cap on 'standard' prices.