Prices Fuel Cuts:

Catalyst Commercial Services Ltd — Wed, 17 Dec 2008 11:07:03 +0000

The energy regulator has demanded commitments from power companies to slash gas and electricity prices. Alistair Buchanan, Ofgem’s chief executive, told the big six power companies yesterday that they should announce firm pledges to pass on recent steep falls in wholesale energy prices by February at the latest. Amid mounting fears of profiteering, he also said that Ofgem would refer the industry to the Competition Commission if there was not faster progress on cutting bills and scrapping price plans that penalised poorer and more vulnerable customers.

Ofgem, which began a competition inquiry into the industry in February after steep price increases, also said that it was considering changes to the licences of UK energy companies to abolish common industry practices. These included charging customers who use pre-payment meters more than those paying via other methods, such as direct debit. The regulator is also focusing on the cost of electricity to rural customers who are not on the gas grid and unable to benefit from “dual fuel” deals.

Ofgem said that some progress had been made by the energy companies since the inquiry began, including an end to about £500 million of unfair premiums charged to customers. But it demanded “more and quicker action” for customers who were losing out at the moment. “We’ve seen progress, but it’s certainly not the end-game,” Mr Buchanan said.

Ofgem’s announcement unleashed a wave of criticism, in which the regulator was accused of acting feebly. Paul Kenny, the leader of the GMB trade union, said that the Government needed to close down Ofgem and replace it with a beefed-up watchdog. “Ministers need to get the message fast. Ofgem does not have the power or the political will to stop the energy companies ripping off consumers. Threatening to refer these companies to the competition commission is not taking action, it is the equivalent to sending a memo,” he said

Centrica, the owner of British Gas, said that it had already cut prices for pre-payment customers. “We are fully confident we will meet all Ofgem’s requirements for transparency and fairness in our pricing,” Phil Bentley, the managing director of British Gas, said.

Meanwhile, the Energy Retail Association, which represents the six big energy producers, said that it took Ofgem’s statement seriously. “All the companies will be considering the concerns Ofgem has raised. However, today’s statement also recognises that energy companies have already invested £300 million in response to the regulator’s report,” it said.

As well as British Gas, the UK’s biggest power companies include Scottish & Southern Energy, E.ON, RWE npower, Iberdrola’s Scottish Power and EDF Energy, the UK arm of Electricité de France, the French power group.

This post has been viewed 1199 times.

The UK's Largest Energy Blog - Catalyst-Commercial.co.uk » Prices Fuel Cuts:

Prices Fuel Cuts:

Related posts...