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Energy bills may reduce?
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Energy companies face government grilling over fuel bills
Tuesday 18 November, 2008
By Becca Talbot becca.talbot@consumerchoices.co.uk
The energy minister is expected to urge Britain’s ‘big six’ suppliers to pass on cost savings in a meeting later today, following months of falling wholesale gas and oil prices.
Energy companies will be urged to pass on savings to their customers in the wake of massive falls in oil and gas prices when Ed Miliband, the energy and climate change secretary, meets leaders of the “big six” suppliers later today.
The government is under increasing public pressure to act on falling energy prices, and wants suppliers to commit to price reductions.
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"The government should be seen to take more decisive action in extending the Winter Fuel Payment"
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Miliband will also ask what progress has been made in ending unjustifiable prices for customers with prepayment meters, who are among the poorest and most vulnerable, according to new figures from energy watchdog Consumer Focus.
Energy regulator Ofgem has given the companies until 1 December to draft firm price cut proposals. Energy minister Ed Miliband has said he will consider legislation to force suppliers to pass on price cuts, if the deadline is not met.
Britain’s second biggest supplier, Scottish and Southern announced last week it is considering slashing prices for its customers in the New Year, and would reduce the prices of its gas for prepayment meter customers by 3% later this month, to help narrow the price gap between them and customers on standard tariffs.
Prepayment profits
Energy watchdog Consumer Focus believes energy suppliers are making more than £500m a year in extra charges from customers on prepayment meters, it revealed yesterday.
Jonathan Stearn, a campaigner for Consumer Focus, said suppliers were using the higher charges prepayment customers pay for their gas and electricity to help subsidise cheaper deals for customers on standard tariffs.
“Companies could be making up to £550m a year from extra charges they charge on prepayment meters,” he said. “They are making the most money out of those on prepayment meters and often those are the people on the lowest incomes.”
National Energy Action (NEA), the fuel poverty charity, has estimated that prepayment meter customers paid on average £359 more a year than those with normal meters.
Maria Wardrobe of NEA said: “We have been urging suppliers for some time now to pass on the reductions especially to those who are vulnerable this winter. Price reductions before Christmas would be hugely welcomed.”
She continued: “We feel government should be seen to take more decisive action in extending the Winter Fuel Payment this winter to others who are vulnerable, such as those with young children and people with disabilities, as well as the elderly.”
Chris Eagle, commercial manager at EnergyChoices.co.uk said: “The outcome of today’s meeting with the ‘big six’ could really shake up the energy market. If suppliers are forced to pass on the fall in wholesale prices, energy bills may be a lot lower in the New Year.”
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