UK consumer group Which? calls for energy price review

Posted at October 20, 2012 » By : » Categories : News » Comments Off on UK consumer group Which? calls for energy price review

UK consumer group Which? is calling on the Prime Minister David Cameron to launch an urgent review of the energy market after the latest round of price rises.

Consumers are facing higher energy bills this winter after British Gas, npower and Scottish Power all announced rises in response to increased wholesale gas costs.

According to Which?, average energy bills are 13% higher than last year and are one of consumers’ main financial concerns.

A year ago, the organisation organised a summit with the government, represented by the Department of Energy and Climate Change (DECC), energy suppliers and other consumer groups to help tackle energy issues.

But Which? says precious little has been done since the summit to help consumers, who now face a new round of price hikes.

“We are calling on [David Cameron] 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,” Which? executive director Richard Lloyd writes in an open letter published today.

“The energy companies blame wholesale price increases but even the regulator has found that prices don’t fall when the wholesale price drops,” he goes on.

Lloyd says there need to be more transparency in the energy market, particularly on pricing, which is dominated by a handful of companies “seemingly unaffected by the normal competitive pressure of price and customer service”.

Which? says that energy regulator Ofgem’s proposals to overhaul the retail energy market, which are due shortly, are insufficient to address the problems.

“We 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,” says Lloyd.

The regulator should have the power to cap standard prices, which most consumers are on, to ensure fairness, says Which?.

But DECC has hit back at the suggestion, saying that consumers will not be helped by yet another inquiry, which could take years to complete and implement.

“We know what the problems are, we want to get on with tackling them now,” said a spokesperson. “We have the Energy Bill due this autumn, and Ofgem is due to move to the next stage of its review before winter. In the meantime we’re offering practical advice to households on how to get energy bills down and keep their homes warm.”

Earlier this week, Energy Secretary Ed Davey wrote to all MPs offering energy saving hints for their constituents.

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