Ofgem’s latest findings have brought more criticism onto some of the UK’s largest energy companies in a week where the ‘Big Six’ are already being held to account by a government committee over pricing.
Ofgem claim that energy companies have seen wholesale electricity costs fall over the last three years whilst putting up prices for homes and businesses across the UK.
Npower seem to be first in line for most of the criticism, with Ofgem reporting the commercial energy firm paid on average:
All the while increasing retail prices by 5.1%, 7.2% and 9.1% in those same years, respectively. E.ON and EDF also found to have raised prices in spite of mostly small changes in wholesale electricity costs.
Four of the big six – British Gas, Npower, Scottish Power and SSE – have all announced price increases over the last few weeks, causing MPs to call the bosses of all the major energy players in the UK before a committee to justify such raises in bills for private and business energy consumers, subsequently Ofgem’s findings could scarcely be more timely.
Energy companies have been quick to justify any price increases in the last four years though, citing the fact that it’s not just wholesale every prices that they must consider when deciding on tariffs.
Additional costs such as ‘green’ costs and levies from the government to help make the UK’s homes more energy-efficient and subsidise renewable energy developments have forced energy companies to pass on some of the costs to consumers.
However, Ofgem say green and social levies make up £112 (9% of an average household bill); a disproportionate increase, even when factored in with wholesale electricity price fluctuations. Energy companies contest this analysis.
Caroline Flint, shadow energy secretary, said the big six must “come clean about why they are imposing yet another round of inflation-busting price rises this winter, when they are already making huge profits”.
“Revelations about rising profits and the growing gap between wholesale costs and household energy bills highlight why answers are needed,” she said.
As well as government pressure, energy companies were also revealed as among the most disliked firms in the country.
A Populus poll of 2,056 people conducted over the weekend scored energy companies a positive rating of just 28.2 out of 100 – putting them only behind payday loan companies and tobacco giants in negative public opinion.
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