Energy News

Energy watchdog: Suppliers ‘short-changing customers’

Thursday 25 June, 2009

By becca.talbot@consumerchoices.co.uk

Britain’s energy giants are overcharging customers by £74 a year by failing to pass on billions of pounds of savings made from the falling prices of gas and electricity.

Consumer Focus has revealed that the drop in wholesale prices has saved Britain’s “big six” energy suppliers around £1.6billion, yet this has not been reflected in their customers’ energy bills.

Consumer Focus calculated that the companies are overcharging households by a combined £1.66billion this year, based on best assumptions on the cost of wholesale energy to the “big six.”

Philip Cullum, deputy chief executive at Consumer Focus, said: “Our new research for the first time shows the reality. The companies are pocketing £1.6billion extra while millions of households struggle to make ends meet.”

However, in response to the watchdog’s claims, the Energy Retail Association (ERA), which represents the energy giants, said Consumer Focus had made some basic mistakes in its report.

Garry Felgate, chief executive of ERA said: “It is misleading of Consumer Focus to suggest that consumers are being overcharged. The amount of gas and electricity a customer uses can form as little as half their annual bill.

“The remainder includes other costs, such as transporting gas and power and meeting the government’s carbon emissions reduction targets,” he reasoned. “All these costs have risen sharply in recent years.”

However crude oil prices have dropped from $147 a barrel in July last year to about $70.