One in three households is likely to find gas and electricity costs have become unaffordable by 2015.
They have already seen bills more than double in the past eight years, according to consumer groups.
Further increases at the same rate could reach the tipping point of £1,582 in three years and £2,766 by 2018.
Ann Robinson, from uSwitch.com, which compiled the figures, said: ‘The UK is hurtling towards a cliff beyond which the price of household energy will become unaffordable.’
An estimated 6.5million people already live in fuel poverty, where they have to choose between paying for heating or for other daily essentials.
As bills climb further, three-quarters of families say they will have to ration energy and six in ten are likely to go without adequate heating, uSwitch.com estimates. ‘Time is running out – if pricing trends continue we will hit “crunch point” in less than three years,’ Ms Robinson added.
The predictions also do not include any extra costs added to bills by power companies investing in technology to make their fuels greener.
Maria Wardrobe, from fuel poverty charity National Energy Action, said: ‘It is time to utilise some of the revenues from carbon taxes and the increased revenue from VAT on bills to pay for a programme to protect the most
vulnerable.’
30/05/2012 - metro.co.uk
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Wednesday, 30 May 2012
Friday, 11 May 2012
British Gas owner Centrica warns of higher energy bills
Centrica, the owner of British Gas, has said that despite its recent cut in electricity prices, rising wholesale gas costs will make supplying energy to UK households more expensive this year.
It said gas costs would be 15% higher next winter, while other costs would add another £50 to the cost of supplying energy to the average home.
"The trend for retail energy costs therefore remains upwards," it said.
In January, British Gas announced a 5% cut in its standard electricity tariff.
Centrica said it remained on track to grow profits by 10% or more at its residential business, largely due to controlling costs.
It said average household gas consumption for the four months to April was up 1% on a year earlier, while electricity consumption was down 3%.
Earlier this year, Centrica reported flat profits following a "tough" 2011, which included a 30% fall in operating profits at British Gas to £522m.
11/05/2012 - BBC
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It said gas costs would be 15% higher next winter, while other costs would add another £50 to the cost of supplying energy to the average home.
"The trend for retail energy costs therefore remains upwards," it said.
In January, British Gas announced a 5% cut in its standard electricity tariff.
Centrica said it remained on track to grow profits by 10% or more at its residential business, largely due to controlling costs.
It said average household gas consumption for the four months to April was up 1% on a year earlier, while electricity consumption was down 3%.
Earlier this year, Centrica reported flat profits following a "tough" 2011, which included a 30% fall in operating profits at British Gas to £522m.
11/05/2012 - BBC
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Tuesday, 1 May 2012
Millions of families are being overcharged for gas and electricity because of energy firm stitch-up
Five million families are being overcharged for gas and electricity by as much as £330 a year as the result of a stitch-up by energy firms.
The 'Big Six' energy firms are punishing long-time loyal customers with higher tariffs in order to subsidise cheap deals for new households.
At the same time, they are spending more time looking after their profits than improving efficiency and competing with each other in order to deliver lower prices.
As a result, families could be missing out on savings equivalent to £1.9billion by 2020, according to a study by the Institute for Public Policy Research.
The think-tank said the industry regulator, Ofgem, is not being tough enough with energy firms – British Gas, Scottish & Southern Energy, Npower, EDF, Eon and Scottish Power.
In theory, there are rules in place where energy tariffs should reflect the cost of supplying the customer. However, the IPPR said these are not being applied.
As a result, some of the firms are guilty of pushing loss-leader tariffs in order to win new customers, while
the money to do this comes from charging existing account holders more.
This tactic allows them to undercut any new energy firms that might want to enter the market, so minimising competition.
The IPPR said that in any normal market, which is operating properly, rival firms will try to squeeze out costs and improve efficiency in order to keep prices down.
However, it said there is no evidence that this is happening as far as the 'Big Six' are concerned.
The IPPR said: 'The Big Six energy companies are continuing to overcharge their existing customers to subsidise cheap offers.
'As a result some families are paying as much as £330 more than their neighbours to use the same amount of energy from the same company.
'Over five million people could be overcharged because tariffs are not cost reflective as required by Ofgem. So-called loss leading tariffs from the Big Six also prevent competition as smaller suppliers cannot compete.'
IPPR associate director, Will Straw, said: 'Our research adds to the growing body of evidence that competition is not working in the energy market.
'We are calling on the Big Six and Ofgem to demonstrate whether efficiency savings are being achieved in the energy market and whether consumers are benefiting from lower bills as a result, as we would expect if competition was working.
'We need more competition among energy companies so that households get a fairer price for their energy. Ofgem's previous attempts to reform the market have not delivered the changes needed. UK consumers cannot afford further delays in bringing down bills.
'Some of the Big Six are failing to offer consumers tariffs that properly reflect the true cost of energy. Some households are paying £330 more than their neighbours while millions are being overcharged.
'What's worse is that poorer and older households are the most at risk of being overcharged. Ofgem must crack down on firms found to be breaching their rules on cost reflectivity.
'Energy prices are a huge burden on UK consumers. Ofgem must act faster, bare its teeth and enforce its policies.'
Director of policy at the official customer body, Consumer Focus, Adam Scorer, said: 'This report raises a number of important questions about how competitive our energy market actually is and whether consumers lose out as a result.
'There are many improvements which can be made to this market, but a good start would be to ensure that smaller suppliers can compete with the Big Six on a level playing field.
'Customers also need to know that suppliers are really competing for their business by passing on efficiencies and wholesale cuts, as well as ensuring customer service is first rate. We need a market that serves everyone not just a minority of pro-active switchers.
'We have long held concerns that the energy market needs to do more to increase competition and demonstrate prices are fair. If suppliers are unwilling to do this, then we would call on Ofgem to intervene to ensure consumers are getting a good deal.'
30/04/2012 - Dailymail.co.uk
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The 'Big Six' energy firms are punishing long-time loyal customers with higher tariffs in order to subsidise cheap deals for new households.
At the same time, they are spending more time looking after their profits than improving efficiency and competing with each other in order to deliver lower prices.
As a result, families could be missing out on savings equivalent to £1.9billion by 2020, according to a study by the Institute for Public Policy Research.
The think-tank said the industry regulator, Ofgem, is not being tough enough with energy firms – British Gas, Scottish & Southern Energy, Npower, EDF, Eon and Scottish Power.
In theory, there are rules in place where energy tariffs should reflect the cost of supplying the customer. However, the IPPR said these are not being applied.
As a result, some of the firms are guilty of pushing loss-leader tariffs in order to win new customers, while
the money to do this comes from charging existing account holders more.
This tactic allows them to undercut any new energy firms that might want to enter the market, so minimising competition.
The IPPR said that in any normal market, which is operating properly, rival firms will try to squeeze out costs and improve efficiency in order to keep prices down.
However, it said there is no evidence that this is happening as far as the 'Big Six' are concerned.
The IPPR said: 'The Big Six energy companies are continuing to overcharge their existing customers to subsidise cheap offers.
'As a result some families are paying as much as £330 more than their neighbours to use the same amount of energy from the same company.
'Over five million people could be overcharged because tariffs are not cost reflective as required by Ofgem. So-called loss leading tariffs from the Big Six also prevent competition as smaller suppliers cannot compete.'
IPPR associate director, Will Straw, said: 'Our research adds to the growing body of evidence that competition is not working in the energy market.
'We are calling on the Big Six and Ofgem to demonstrate whether efficiency savings are being achieved in the energy market and whether consumers are benefiting from lower bills as a result, as we would expect if competition was working.
'We need more competition among energy companies so that households get a fairer price for their energy. Ofgem's previous attempts to reform the market have not delivered the changes needed. UK consumers cannot afford further delays in bringing down bills.
'Some of the Big Six are failing to offer consumers tariffs that properly reflect the true cost of energy. Some households are paying £330 more than their neighbours while millions are being overcharged.
'What's worse is that poorer and older households are the most at risk of being overcharged. Ofgem must crack down on firms found to be breaching their rules on cost reflectivity.
'Energy prices are a huge burden on UK consumers. Ofgem must act faster, bare its teeth and enforce its policies.'
Director of policy at the official customer body, Consumer Focus, Adam Scorer, said: 'This report raises a number of important questions about how competitive our energy market actually is and whether consumers lose out as a result.
'There are many improvements which can be made to this market, but a good start would be to ensure that smaller suppliers can compete with the Big Six on a level playing field.
'Customers also need to know that suppliers are really competing for their business by passing on efficiencies and wholesale cuts, as well as ensuring customer service is first rate. We need a market that serves everyone not just a minority of pro-active switchers.
'We have long held concerns that the energy market needs to do more to increase competition and demonstrate prices are fair. If suppliers are unwilling to do this, then we would call on Ofgem to intervene to ensure consumers are getting a good deal.'
30/04/2012 - Dailymail.co.uk
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