Energy News

UK Energy Market Investigated for Unfair Practices

Friday 08 February, 2008

By Denae D'Arcy

The Common Select Committee is reviewing the UK's energy market for unfair practices including monopoly on the market and price gouging.

The Common Select Committee is reviewing the UK’s energy market for unfair practices including monopoly on the market and price gouging.

The enquiry will explore whether current gas and electric providers in the UK are using unfair and even secretive business methods to defraud customers. The industry came under fire after many energy companies increased prices and other new providers complained that the market was not competitive. Companies which have raised prices for service include NPower (www.npower.com), British Gas (www.britishgas.com), and Scottish Power (www.scottishpower.co.uk).

The Committee’s chairman Peter Luff MP said in an interview with The Times that the first stage of gathering written evidence is under way. Energy executives will next appear before the committee to answer questions in a hearing scheduled for June.

Ofgem, the energy watchdog organization has reported there are no problems with UK’s energy providers. In a meeting with the Chancellor in January Ofgem Chief Executive Alistar Buchanan said “Ofgem wants to reassure customers that we constantly monitor the competitive market and regularly push our analysis. Obviously we look even more closely during periods when prices are rising, but we have no evidence of any anti-competitive behaviour.” This has not stopped the Committee from continuing its investigation.

A new wave of ‘energy poverty’ has swept across the UK. Chris Eagle, Commercial Manager for EnergyChoices.co.uk explains the term: “There is a trend in the UK right now which shows more and more customers cannot pay their energy bills. The prices are too expensive.”

Energy companies admit they have a large number of customers that cannot pay. Duncan Sedgwick, Chief Executive of the Energy Retail Association says suppliers work to make sure customers have an opportunity to pay before the service is switched off. “Customers who cannot pay their bill will be offered alternative payment methods including pre payment metering and it is only if all attempts to contact the customer and fit a pre payment meter have failed that disconnections are carried out.”

Eagle welcomes the investigation. “Energy costs are increasing and a formal enquiry into the business practices of large energy companies can potentially allow for cheaper prices. Customers should be sure to monitor prices of energy providers to find the best deals.” Compare the costs and options of energy companies online at EnergyChoices.

For advice on how to stop paying by pre payment, ask your provider. Customers who pay by direct debit usually save more money on their energy bills.

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Pre payment Meters - A Scourge Penalising the Poor

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