Posts Tagged ‘fuel prices’

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Axing of the UK’s Energy Consumer Watchdog

2008 September 25

The BBC this week reported that the consumer watchdog Energywatch will be scrapped at the end of this month. Energywatch is an independent body that monitors the gas and electricity industries. In a move criticised my MPs as a “spectacularly bad idea”, Energywatch will be absorbed by a new multi-purpose agency, Consumer Focus.

MPs on the Commons Business and Enterprise Committee said consumer protection was being risked. The new body will replace the National Consumer Council and Postwatch as well as Energywatch.

The chief executive of Energywatch, Alan Asher, said: “There will be some support for consumers under threat of disconnection, and some other vulnerable customers, but I fear that it’s going to be a rather limited service and most of us will be left to fend for ourselves.” Labour committee member Michael Clapham said: “We require somebody in that market who is robust and is going to take aggressive action to make sure the interests of consumers are looked after. By removing Energywatch, we are not going to have that.” Energywatch has helped five million customers recoup £35M since being set up in November 2000.

The government said Energywatch lacked powers and was inefficient. Consumer affairs minister Gareth Thomas said: “What we are bringing in is not only a body which will continue to represent consumers, we are also forcing companies to handle complaints better. People shouldn’t have to go to a complaints handling body.”

But the Child Poverty Action Group is worried about the timing. And that the new body will be focussed on setting itself up while families struggle to pay bills.

Already reported in Thursday Series, energy companies talk of passing on the £910M for help to consumers – to consumers. And they are receiving covert subsidies from government. And they are charging consumers around £38 a year each for generating stations they have yet to build.

Meanwhile, Times Online reported on the 14th that these same energy companies are still tricking customers out of money.

Times Online reported a number of tactics that energy companies use to boost profits from customers:

  • Energywatch warned in the week 7th-14th September of customers who have underpaid for long periods due to estimated bills. In some cases, these have been charged for up to two years. When an actual reading is sent, they can be overcharged by up to £100. Why? Because when calculating the back-readings, the companies have used today’s – higher – prices and not those at the time. Energy companies deny the practice is widespread.
  • Energy companies have changed from announcing price rises a week or more in advance to just hours. This prevents customers switching before being charged higher rates.
  • In an anti-competitive move, companies have started charging exit penalties for switching suppliers. British Gas and Scottish Power charge up to £100 and £50 respectively.
  • In defiance of European Union rules, lawyers say customers not paying by direct debit are being over-charged £699M. EU rules say the supplier charges must reflect the cost to the supplier. Individually this is only £20. But suppliers are charging up to £69 more according to Ofgem.
  • And energy companies are also lowering the reductions for paying by direct debit. British Gas raised bills by 35% for quarterly paying customers and 42% for direct debit paying ones.

Sources

http://news.bbc.co.uk/1/hi/uk/7626620.stm
http://www.timesonline.co.uk/tol/money/article4747151.ece

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UK: Lights Out in Five Years

2008 September 18

In last week’s Thursday Post, we looked at the UK government scheme to help households with rising fuel prices. We saw that a deal was struck with privately-owned energy companies. And we saw that straight away those companies hinted they would pass on the costs to households.

We also saw that the UK government said they allowed the companies to keep huge windfalls to finance future power generation. And we also saw that a National Housing Federation report warned the companies were instead passing the windfall on to shareholders.

This week, how energy companies are:

  • Charging consumers £1Bn a year in bills for wind farms that aren’t being built fast enough,
  • Yet we will have blackouts as early as five years from now, because
  • The companies cannot build nuclear plants fast enough to meet the government programme, and yet
  • Despite saying publicly the nuclear industry must fund the building, taxpayers’ money is being offered.

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