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What can you do about rising energy prices?

Rebecca Rutt
by Lovemoney Staff Rebecca Rutt on 19 October 2012  |  Comments 5 comments

Rebecca Rutt looks at why energy prices are being ramped up this winter, and what you should do to combat them.

Energy prices are about to go through the roof as almost all the major providers announce rises. But why are we having to pay even more for our gas and electricity and is there anything we can do to stop this?

Four of the big six energy providers are hiking their prices and these will be implemented over the winter months.

Scottish and Southern Energy has already bumped up its prices by 9%, while British Gas is to push up prices by 6% from the 16th November. npower is increasing its gas bills by 9.1% and electricity bills by 8.8% from 26th November, while Scottish Power customers will see a hike of 7% from the 3rd December.

The rise has been blamed on increase in the wholesale gas market and also the cost of Government energy efficiency programmes.

But even if prices are going up on the wholesale market, many energy companies, such as British Gas, have made huge profits during the past year. So why is it getting away with making us pay more?

Hannah Mummery, spokesperson for Consumer Focus, said that we have a private energy market in the UK and energy prices aren't regulated by the Government. She added: "Ofgem, the regulator, has a duty to ensure that the market is working, that it's fair and competitive, but energy firms are businesses and if they think they've incurred higher costs they are entitled to pass them on to their customers."

To combat the rises, and in an attempt to make the energy market more competitive, David Cameron has said energy companies should be forced to give customers the cheapest tariff available. They will also need to let existing customers know if they should be on a cheaper tariff.  These changes are all part of the new Energy Bill which is currently being debated in Parliament.

Mummery pointed out that there was still very little detail on this idea, but said greater information for customers could only be a good thing.

The people we spoke to about energy bills were unimpressed. One described them as "extortionate", while another said they felt they were being "ripped off".

Switching suppliers, turning down the thermostat and putting on another jumper are all ways to cut down on your energy bills. But while we’re struggling to pay more, the energy companies are rolling in profit and not giving the best deals to customers. This hardly seems fair to me.

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Comments (5)

  • Mike10613
    Love rating 626
    Mike10613 said

    Scottish power is not only raising prices, they are cutting the discount given for having dual fuel and paying by direct debit. The rise in the gas price is way above 7%. Many deals run out just after the price rise and so phone Scottish Power just before you discount of the standard tariff runs out and ask if they have a better deal. I expect many people to be automatically be put on standard tariff when the discount deal and price fixes run out.

    Report on 25 October 2012  |  Love thisLove  0 loves
  • Grobbendonk
    Love rating 28
    Grobbendonk said

    I think it's clear that energy privatisation has failed miserably. Complex tariffs need fixing, and I grudgingly applaud the noise from government on that, but this is helping with only one of several problems. The two main problems are

    1. Firms operate for profit, rather than customers. A simple fix for that would be to set corporation tax at a level linked to customer satisfaction - the higher the satisfaction, the more profit a company could make. (In most cases at the moment, that would be pretty close to zero)

    2. Short-term view. We need the companies to invest in generating more power, being more efficient, encouraging power saving, improve the supply grid, and, most importantly, reduce our reliance on imported fuel (including fission fuel for those about to say "nuclear is better than renewables" - mostly because everyone else is going that way as well, and that means higher fuel prices)

    I'm afraid our privatisation experiment has failed - it doesn't meet the needs of our country and hence needs to be fixed. We need heavy regulation, or nationalisation of the critical parts, simply to get things going back in the right direction.

    Report on 26 October 2012  |  Love thisLove  0 loves

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