Energy News

‘Energy bills will rise again in 2010’: Ofgem

Friday 18 September, 2009

By Becca Talbot - becca@consumerchoices.co.uk

Energy bills may be going up in 2010 after Britain’s “big six” energy giants told regulator Ofgem it’s unlikely gas and electricity prices will be cut again this year.

Britain’s energy suppliers have said that further price cuts are unlikely this year despite falling wholesale costs, following an investigation into the energy market by regulator Ofgem

Ofgem’s third quarterly energy price report, published today, revealed that the supplier’s margins between wholesale and retail prices have increased by £110 for gas and £80 for electricity, per household.

The energy suppliers unanimously agreed that other factors, such as transportation costs and ‘environmental commitments’, were rising steeply, forcing them to keep consumers’ gas and electricity rates high. On that basis Ofgem said that these costs are likely to “put further upward pressure on customer bills.”

Britain’s biggest supplier, British Gas (www.britishgas.co.uk), said: “Prices are likely to remain at historically high levels and, in fact, are likely to increase as non-commodity costs rise ever upwards.”

Last month, Ofgem’s chief executive Alistair Buchanan wrote to the energy giants, urging them to “respond” to falling wholesale prices, to combat the rise in fuel poverty figures expected this winter.

Buchanan said that the suppliers “owe it to their customers to better explain their pricing position to them,” and added that customers need to know how wholesale prices will affect their future energy bills.

French energy giant E.ON (www.eonenergy.com) responded by saying: “[We] do not believe there is a clear message regarding future wholesale costs movements that can be communicated to customers.”