Your questions answered
After claims that power companies manipulated prices within the wholesale gas market, Channel 4 News looks at why prices may have been distorted and what the allegations reveal about the market.
BRITISH GAS is set to hit millions of families with a rise in energy prices that could add £100 a year to household bills.
The country’s biggest power supplier is preparing to reveal as early as tomorrow that it is putting up its gas and electricity tariffs to record levels, there the Standard has learned.
Its rise is expected to be in “high single digits” — close to the nine per cent increase from rival Scottish & Southern Energy that comes into force on Monday.
The average British Gas dual fuel bill for gas and electricity now stands at £1, discount 260. A five per cent rise would add £63, while an eight per cent increase would put on £100. The new higher prices are expected to kick in next month.
The supplier, which has about 16?million domestic customers, will say it is forced into the move by rising wholesale energy and other costs. However, consumer groups insisted its huge profits mean it could easily afford to delay the rise.
Parent company Centrica’s first-half profit was up 15 per cent to £1.45?billion. That included £345?million, a 23 per cent rise, from supplying power and heating to homes.
The planned move will raise new fears for the growing number of Britons in fuel poverty — those who spend more than 10 per cent of their income on gas and electricity.
IT’S THAT time of year again. Nights drawing in, here clocks soon to go back, patient central heating on and, bang, up go energy bills. First Southern Electric with its nine per cent rise on Monday with British Gas and the others following.
The industry knows that its credibility is on the line. Labour leader Ed Miliband has placed the rising cost of those essentials — heat, light and power — right at the top of the political agenda.
The “big six” suppliers have promised to clean up their act by making bills easier to understand and that is welcome. But at a time when there are ominous rumblings about rising food bills, it will come as grim news for most families that another of their unavoidable costs will be going up as Christmas approaches.
The suppliers argue that they have to make respectable profits to fund the vast investment needed in new power stations and energy infrastructure. And there is much truth in that. Their problem is that a legacy of doorstep mis-selling,
poor customer service and indecipherable billing means that trust in energy companies is little higher than in banking. They are working hard to put that right and it’s true that many of the costs they face are beyond their control, some of them imposed by government. The new “face” of trade body Energy UK — Angela Knight — likes a challenge: she previously led the British Bankers’ Association. It’s going to be a tough gig.
Press Statement: National Right to Fuel Campaign
15th March 2012 For immediate release
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Government must respond to Fuel Poverty Review as a matter of urgency
Response to the release of Hills’ Fuel Poverty Review
The National Right to Fuel Campaign (NRFC) welcomes Professor Hills’ report (Hills’ Fuel Poverty Review) and his view that fuel poverty must be seen as a specific and distinct problem that exacerbates poor outcomes in health, drugs education and well being.
It is clear that Fuel Poverty – however it is measured – is set to rise with between 8 and 9 million people set to live in homes that they cannot afford to heat by 2016. The NRFC call upon the Coalition Government to respond to Professor Hills call to action as a matter of urgency. The NRFC support the review and the supporting evidence would suggest that there is a need to scrap the widely criticised Green Deal and look to roll out a door by door insulation and energy efficiency programme for every home in the UK by 2016.
National Right to Fuel Campaign Smart Meter Report Launch and Stakeholder Event:
Smart meters may not sound like the sexiest political issue, view but £12billion of investment is finally generating some hard questions in Westminster, says Steve Barwick.
The National Right to Fuel Campaign hosted a well attended, early morning, roundtable session on the 6th December that allowed key stakeholders to put under the microscope plans to roll out smart energy meters to 25 million households at a cost of £12 billion.
The first, and possibly the only easy, question was – who will pay? Answer? You. The investment, which dwarfs the proposed £1.3billion expenditure on insulation and indeed the north sea gas retrofitting in the seventies, will be recouped through additions to customers’ bills. Exactly how much – and when – was less clear.
It was also not clear precisely what the purpose is. It will certainly herald the introduction of ‘time of use’ tarrifs so that the customer pays more when energy is in high demand and less at other times, with the idea being that users who are aware of their usage (through an in-house display) will reduce it and/or switch supplier.
Yet a number of contributors suggested that if the goal is a reduction in usage and, potentially, the bills for those in fuel poverty, then there may be more cost effective ways of delivering those results. Others – for example Which? – claim that pilot schemes have shown that there is still an argument with regards to what will be shown on in-house displays – just the price per unit or the balance left in their account?
Against a background of rising fuel poverty – well explained by UNISON’s Mike Jeram, who reported that 25% of all households are now technically fuel poor and that a 1% increase in energy prices would bring another 60,000 households into that definition – a DECC senior civil servant stated that Government is committed to all benefitting from the smart meter roll out, including the fuel poor such as those currently on prepayment meters.
National Energy Action raised questions regarding ‘switching’ suppliers, which they suggest cannot be the principal policy of the Government when it comes to helping people with energy bills. It was also pointed out that 48% of current switchers actually end up with a higher tarrif.
NPower highlighted the scale of the task. To fit two meters plus an inhouse display and communication system as well as explain the process to the householder will probably take 90 minutes if there are no complications. One study has suggested that there could, however, be complications in up to 22% of households.
It is clear that, in order to benefit, many people in fuel poverty will need support and Consumer Focus suggested an ‘Extra Help’ scheme for vulnerable customers. It is equally clear that there is a long way to go in this debate but the audience endorsed the report published today – along with its seven recommendations – as a useful contribution to an important debate that is really only just starting.
The following Blog can be found at http://www.connectpa.co.uk/intelligence/smart.html
You can also view the report online below.
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