Looks like energy companies are still the country’s worst offenders- on just about everything. This week, new research from uSwitch.com shows that energy providers are not just charging us an arm and a leg they are doing so incorrectly, with almost two in ten households (19%) being incorrectly billed by their energy company within the last two years.
With 19% of households incorrectly billed- and a total of 11% who have had this happen more than once, only HMRC is considered more inept at getting bills right, with Council Tax, mortgage companies and insurers all coming up roses over the last eight years of the survey. While customers who have been overcharged have been in the news recently, as the energy companies hold on to refundable cash, 39% of those surveyed, equivalent to 10.14 million people, were surprised with an unexpectedly large bill following a ‘bill adjustment’, with the average extra amount owed being £146. More than one in ten (14%) have unexpectedly ended up owing £200 – £400, while 7% have ended up owing over £400.
And when extra amounts are incorrect? It is taking even longer for energy companies to sort out the problem- the average time is now just under two months, up from one month a year ago.
Ann Robinson, Director of Consumer Policy at uSwitch.com, says: “Consumers are typically paying over £100 a month for gas and electric, so the fact that they cannot rely on the accuracy of their bills is simply unacceptable. With energy bills accounting for the largest chunk of household expenditure after rent and mortgage payments, billing blunders can leave consumers feeling frustrated, susceptible and out of pocket.”
The Big Six energy suppliers have been hounded for a while and they’ve reacted badly so far, threatening Britain with a blackout. Now, they’re going to be extra annoyed as they are going to have to disclose long-term power prices, twice daily, from next month, thanks to new rules from Ofgem.
If they don’t comply, they’ll be penalised.
“Almost two million customers are with independent suppliers and we expect these reforms to help these suppliers and any new entrants to grow,” Andrew Wright, Ofgem’s chief executive, said in a statement.
Energy minister, Ed Davey said British Gas might have to be broken up to put an end to excessive profit margins and Ofgem, the Office for Fair Trading and the Competition and Markets Authority have all been investigating the competition in Britain’s energy retail market.
“Ofgem continues to think there is an issue around liquidity and transparency in the wholesale energy market,” said Peter Atherton, utilities analyst at Liberum Capital. ”But whether (these rules) solve any of the problems is questionable.”
It’s a messy situation and it doesn’t look like anyone’s going to be getting cheaper bills any time soon.
As every frog with a hand up his back knows, while it isn’t easy being green, if there is a financial incentive to being more energy efficient, people are more likely to join in. But what happens when energy (and cost) saving claims are
made-up exaggerated not quite accurate?
The Energy Savings Trust has now turned it’s suspicious attention on manufacturers of white goods, claiming that 20% of products do not live up to their energy efficiency claims. This is in addition to an EU investigation that found one in five products were not compliant with energy standards, including items being incorrectly labelled as regards their energy efficiency.
As a result, the Energy Saving Trust will now be independently purchasing and testing energy-using products across Europe to verify the energy saving claims made by manufacturers. This is part of a product surveillance programme, known as MarketWatch, to make sure consumers are getting the best deal through fully compliant energy-using products that match their energy saving claims in real-life situations.
Over three years, the scheme will see over 300 inspections in shops and 300 in online stores, checking a total of 25,000 products to see if they are properly labelled. Additional laboratory tests will also be employed to verify the true energy efficiency of products against the performance claimed.
Philip Sellwood, chief executive at the Energy Saving Trust, said: “Consumers are wising up to the monetary savings of using the best and most efficient products – they’re trying to do the right thing but need to be rewarded properly through the savings stated being realised.”
“That’s why we aim to be the eyes and ears for UK consumers to ensure energy efficiency claims by product manufacturers are true and will save them money on their energy bills. We need to address the fact that consumers across Europe are not maximising the energy saving benefits stated by millions of products.”
Energy rating on white goods is big business, with the likes of Which! and John Lewis publishing details of the ‘true’ cost of buying a new appliance once energy running-cost savings are also imputed. Energy Saving Trust figures indicate that the UK alone could save nearly £1.3 billion a year on electricity bills by switching to more energy efficient products. This includes fridges, freezers, tumble dryers, washing machines and dishwashers. But only if the appliances achieve the energy savings stated on the tin.
Rick Haythornthwaite – the chairman of Centrica (who own British Gas) and possibly owner of a fictional surname – has said that the political debate over energy prices risks “the lights going out” in the whole of Britain and that blackouts were ”looming much larger” and no longer the “figment of a scaremonger’s imagination”.
What’s caused this jumpy warning? Well, for a kick off, Ed Miliband has said Labour plans to freeze energy prices if they win the 2015 election and energy secretary Ed Davey has suggested that Centrica should be broken up.
“I think the reputation of Britain as a place in which to invest is under threat and the time to correct that is now, not after the 2015 election, by which time the possibility of the lights going out in Britain will be looming much larger,” he said. “And I don’t see this as the figment of a scaremonger’s imagination. I think right now we’ve got to restart collaborative, constructive dialogue around these key issues; we cannot afford to wait, hostilities have got to cease.”
Sam Laidlaw, another bigwig at Centrica, added: “We firmly believe that any form of price control in a competitive market is not the answer and is not in the best interests of customers, and this has been clearly demonstrated by experience in other markets. Such proposals create both short-term uncertainty for all energy suppliers and longer-term additional costs for customers.”
Things are tough at British Gas. They’ve lost 462,000 customers since 2012, with a whopping 100,000 ditching them in the past two months. Profits are down and the company have been raising tariffs. All the energy companies, currently, look worse than bankers and trust is low.
However, with people like Laidlaw on £5million a year, it seems there’ll be little sympathy for political hostilities toward the energy sector, especially if it seems like they’re ready to switch the lights off in Britain, in a sulk.
Hurray! Good energy news at last! Actually, you might want to sit down for this one. We’re so used to getting mightily shafted by energy companies that the idea of them giving our money back to us seems very strange indeed, but unbelievably, it’s actually happening.
Yes, after EDF energy’s decision to refund credit balances if you pay by Direct Debit, five out of the Big Six have agreed to follow suit. So if you’ve got a credit balance of £5 or more, they’ll refund you automatically. British Gas, E-On, EDF, NPower and SSE are all on board. Only the tight wads at Scottish Power are reluctant to lower the threshold for automatic refunds.
Of course, your energy supplier will still try to ‘suggest’ that you roll it over to your next bill, and you’ll need to provide a meter reading before your annual energy review. But it sure beats having to make formal requests to claw back any excess you’ve paid. And it means your hard earned cash will no longer languish in the bulging coffers of the Big Six, racking up interest.
Which! calculate that 55% of energy customers pay by Direct Debit, and that 56% are in credit to the tune of an average of £161. Which means a nice Spring pay out for quite a lot of people.
But although it’s tempting to go and spend it on new clothes, or a slap up meal at the Harvester, maybe we should put it towards something useful – like next winter’s astronomical energy bills…
According to Which!!!, if you’re one of the 3.9m households who are on tariffs that charge different rates for using energy at different times of day, you could well be left “significantly out of pocket” because of inaccurate clocks on your meter.
It seems that people have been warning Which!!! that, for people on tariffs like Economy 7 where you are charged less for using power at night, customers are being overcharged.
Gary Day told Which!!! that his meter was inaccurate, as were those with three of his neighbours. Swalec, as a result, refunded them £2,300. He said: ”I have only checked four meters and every single one of them was wrong. The problem is most consumers don’t go around checking, and we are at a disadvantage because of that.”
A Which!!! spokesperson said: “Having a faulty clock on your energy meter could leave you hundreds of pounds out of pocket. It’s the supplier’s responsibility to ensure they are correct so if you suspect there might be a fault then contact your energy company.”
Meanwhile, over at Ofgem, a spokesman said: “If consumers suspect that their electricity meter is faulty their supplier is required to investigate and make best efforts to resolve the problem. If necessary, as a final option the supplier will make arrangements for the meter to be verified by a meter examiner appointed by National Measurement Office.”
With that, Which!!! are going after the sector – again – calling the whole thing a ‘broken’ market, after The Big Six received more than 5.5m complaints last year. Npower came out on top of the complaints list, followed by EDF, British Gas and Eon. SSE and Scottish Power came last, which is nice for them.
Which!!! have proposed six things which they reckon will fix all this. They want increased competition, transparent trading, something called “people power”, cost control, an increase in customer trust and ultimately, warmer houses.
They’ve shouted all this at the government too, as well as Ofgem, competition authorities and energy companies, but will they listen and act on it?
Richard Lloyd, big wig at Which!!!, said: “Millions of people are unhappy with the service they receive from the suppliers which, combined with low levels of trust is yet more evidence that more must be done to fix the broken energy market. Next month we want the regulators to refer the energy market to the Competition and Markets Authority and launch a full scale inquiry.”
Have you been charged for gas you didn’t use? It’s happening as people are being charged hundreds of pounds for gas meters on their premises, even though they’re only using electricity. Worse still, is that people wanting their gas meters removed are faced with (up to) £400 bills to have them taken away.
It seems that some companies are charging households a fixed daily fee for simply having a certain type of gas meter. The money covers the supplier’s cost of billing and metering. That’d be the cost of counting no gas being used, even in houses that are disconnected.
It seems these bills are a new thing. Reports have said that people weren’t getting these bills at all, but are now getting nasty surprises and being asked to fork out £100 a year for something they’ve never used.
Scottish Power will charge you up to £400 to get rid of your ghost meter, while E.on will ask you for £82 for the privilege.
It seems the best thing to do is to change your provider to someone like British Gas, Npower or SSE who remove gas meters for free (but have other problematic attitudes to billing, so shop around).
A spokesperson for the Association of Meter Operators says: “Removing a meter from someone’s house and capping supply there should only take about half an hour and cost no more than £50. The operative will then return at some point in the next couple of years and decide whether they need to dig up the road and cut the supply at street level — this costs more, but if you are no longer a customer it’s unlikely they could come after you for the cost.”
Energy bills are still a hot topic at the moment, and increased awareness of some of the green levies previously included in our bills has also highlighted the energy savings end of the energy business.
Much of the Government’s Green Deal savings are based on calculations provided by the independent-yet-closely-aligned Energy Savings Trust (EST). However, it was recently suggested that the EST figures were unachievable for most households, meaning the energy savings would not stack up- particularly galling where energy companies were convincing people to invest large sums in insulation and new boilers. The most damning calculation suggested that savings from loft insulation have been around £15.50 a year, rather than the “up to £180″ figure promoted by the EST.
As a result of the initial investigation, the EST said they would look again at their figures, and they have now published revised achievable energy savings. And some of them are even higher than they were before.
As expected, the loft insulation savings figures, for both internal and external wall insulation, have been cut from £460+ down to £270. These new figures are likely to have a considerable impact on the Green Deal figures, where the costs of installation are required to be more than exceeded by energy savings over the Green Deal period.
However, the EST has amazed some by increasing the calculated energy savings on boiler replacement. The new figures claim that replacing a band D gas boiler with an energy efficient A-rated model will now save £160 a year – up £55 from the previous £105 saving calculated. Band E boilers will also see an increase in savings from £155 up to £190. G rated boiler replacements are now shown with a lower saving, but only by £5, down to £305.
Chris Goodall, a keen environmentalist and author of How to Live a Low Carbon Life, told The Guardian that the EST’s figures are still about twice the energy savings actually recorded over the past decade.
“It seems to be using figures which are at the top end of what is conceivably possible and aren’t adjusting adequately for the indifferent quality of most cavity fills and the remaining problems of air leaks and ‘bridges’ that conduct heat through the external wall,” he said, shaking his head sadly.
Other calculations compute that, in order to make the boiler savings outlined above, households would need to be spending £1,600 a year just on heating and hot water- virtually impossible for a typical three bedroomed house.
So what do you think? Are the energy saving cash benefits just a load of old insulation, or are the environmental benefits worth it regardless of the lack of monetary advantage?
Ed Davey – he’s the energy secretary – has asked Ofgem to investigate the profits that the Big Six energy companies have made. If it is found that they’ve been ripping us off, he’ll consider breaking them up into little pieces.
Seeing as Davey is a Lib Dem in a Coalition run by Tories, the likelihood of them letting him do anything of great importance is slim-to-piss-all, so the Big Six inevitably didn’t lose a wink of sleep over this news.
The minister said the debate about energy prices had focused on the cost of electricity, when really, we should be looking at gas prices. In some instances, companies are making five times the profit on gas than they are electricity.
He said that Ofgem should do a “full-scale market investigation”, adding: “I want them to think radically. There could be a number of remedies, including the breakup of some of these companies if they have abused their market power.”
This comes on the back of Ed Milliband promising to go after the energy companies, saying that, should Labour win the next election, they’ll freeze prices (you’ll notice those prices aren’t dropping) and reform the market.
Davey wrote a letter to Ofgem’s chief executive, Andrew Wright, and singled out British Gas pointing out that there is evidence that they tend “to charge one of the highest prices over the past three years, and has been on average the most profitable”. He continued: ”Clearly you will wish to consider whether this is prima facie evidence of an issue in the market and so whether it merits a market investigation reference with the whole gamut of potential remedies that could follow including a breakup of any companies found to have monopoly power to the detriment of the consumer.”
“Alternatively you may of course conclude that no action is needed or potentially some intermediate measure which can be taken by the sector regulator.”
Ofgem, it is over to you.
**UPDATE** Stocks have slumped after the news of a potential breaking up of the Big Six. More here.
Remember the good old days when all utilities were nationalised? When we all got to share in any profits made, rather than an elite group of (offshore) shareholders? Still, private profits were a small price to pay for all the efficiencies of private ownership, clearly. Just ask Royal Mail.
Of course, firms providing energy and water services, for example, do not have it all their own way. In the UK they are watched over by a regulatory body like Ofwat or Ofgem who make sure they take proper care of their customers, and one of the things the regulator regulates is the prices charged for these essential services.
However, the regulators have recently come under fire from MPs who think that they really ought to take affordability into account when setting maximum prices- and specifically the cumulative effect of lots of increases on unavoidable household bills.
Labour MP Austin Mitchell challenged Ofwat and Ofgem to disclose how they involved water and energy customers in their deliberations over companies’ pricing and investment proposals when they appeared before the Commons Public Accounts Committee , saying the regulators “don’t take any account of the way consumers are being struck by other utilities.”
Ofwat chief executive Cathryn Ross claimed Ofwat were “absolutely taking affordability into account” but then admitted that when they “produce our final determinations for prices, are we doing that consciously looking across expected energy bills, expected rail fares and all the rest of it? No, I’m afraid not.”
Ofgem’s interim chief executive Andrew Wright said: “We require companies to understand what consumers’ priorities are. That will take account of how consumers are feeling, their willingness to pay for improvements and so on.” He didn’t, however, have much to say on whether Ofgem asked people if they could afford their current energy bills, let alone ones subject to a price increase. Perhaps he didn’t fancy the likely answer.
Npower in particular were singled out as not giving a fig, after chairperson Margaret Hodge complained about Npower Chief Executive Paul Massara’s failure to turn up: “What is he doing that is more important than accounting for himself through Parliament to his customers? Where is he now?” adding ineffectually “I don’t think we take to that very kindly.”
However, ranting by MPs and the Public Accounts Committee might make things more public, but doesn’t necessarily get anything done. Just ask any of the grilled multinational corporations and accountancy firms if they have now seen the errors of their tax-avoiding ways. Nevertheless, some communication between regulatory bodies would be useful to consumers- if a bit too common-sense to ever see the light of day.
Ofgem has been about as effective in regulating the Big Six as a squirrel trying operate a fork lift truck, and now ministers say it’ll be scrapped if it doesn’t end the monopoly on the energy market.
The ministers’ exact words were that it was in the ‘last chance saloon’ and if it doesn’t encourage more small suppliers to compete, it’ll be scrapped like broken combi boiler.
The government wants to shake up the energy market and create more competition, and have accused Ofgem of getting too cosy with the Big Six. As a result, the big buggers are profiteering, while insisting to Ofgem that their profit margins are small.
Unless Ofgem up their game and deliver an actual plan to end the reign of the Big Six, and stop customers from being overcharged (which is why they exist in the first place), then they will be dissolved, and energy regulation will be in the hands of the Department of Energy and Climate Change.
Ofgem got a bit stroppy about rumours that they might be for the chop. ‘We don’t comment on speculation. We are working with the OFT and the Competition and Markets Authority on our assessment of competition in the energy market and we will be publishing by the end of March.’
Meanwhile, it seems that they’re REALLY not popular in Whitehall – so they’d better watch it.
‘Ofgem have been a nightmare for years.’ Said one government source. ‘They keep Government in the dark about what they’re doing and then spring things on us at the last minute – usually at 3.30 on a Friday afternoon.’
Here’s some positive news for a change…Energy secretary Ed Davey has just announced a new £10m fund to encourage urban communities to get involved in renewable energy.
If you live in the city, you and the people in your area could get up to £150,000 towards solar panels or a shared wind turbine. There’ll also be rewards to encourage communities to save money on their energy bills by collectively switching suppliers.
With energy costs rocketing, making your own solar and wind power no longer seems so pie in the sky, and as creating renewable energy can mean lower (or even non-existent) bills, this seems like a good way to put some power into people’s hands.
So how do you get the grant? Well, it’s not been decided yet, but groups will soon be invited to apply for grant of up to £20,000 to assist with the planning stages and assess what’s possible to achieve in their community. Then loans up to £130,000 will be available to help the project go ahead.
Called the Urban Community Energy Fund, this actually seems like quite a good idea from the government– and a surprisingly socialist one, too. ‘Sock it to The Man and build your own wind turbine, dude’ doesn’t seem exactly in line with Osborne’s attempts to Frack everything up, but let’s be thankful for small mercies, eh?
Well, it’s nice that somebody is getting something out of cripplingly high energy bills. SSE, who apologetically claimed they had ‘no choice’ but to raise energy prices by 8.2% have announced a shameful profit of £1.54bn, and you can bet they’re not going to let you have any of it back.
The profit announcement isn’t going to go down very well with the public, who want to slay the Big Six dragons after their huge price rises in November. SSE are particularly in the firing line as the first to announce price rises in a ‘sorry/not sorry’ tone – plus they were the last to agree on a reduction of prices after a government deal to reduce levies.
Alistair Phillips Davies, CEO of SSE, (no doubt lighting his stoagie with a £50 note) seemed particularly immune to what will surely be a massive customer backlash against the energy giant. In fact, he seemed rather tickled that they were all doing so well.
‘It is encouraging that SSE is on course to deliver real growth in the dividend and increases in adjusted earnings per share and adjusted profit before tax.’
WHOO HOO! REALLY JAZZED FOR YOU, DOLL!
We would crack open the champagne, but we spent all our money putting the boiler on for five minutes.
Ofgem have set phasers to furious and, along with the Government, have accused npower of ‘misleading’ consumers over how they structure our bills. The supplier released a 14-page document called ‘Energy Explained: Inside The Cost Of Energy’, which they hoped would help “create a better understanding of the facts behind the energy industry”.
In a bid to help us all minimise our costs, they added that our bills are high because our “old and draughty” houses waste too much gas and electricity and, with some words on insulation they also stated that costs beyond their control would see bills going up until 2020 by a projected 74%.
Ofgem aren’t having any of it, replying: “We welcome npower’s effort to inform the energy debate, however their data on network costs is incorrect and misleading. We offered to help npower improve the accuracy of their numbers for network charges and it is disappointing that they did not engage fully with us until after the document had been circulated.”
The energy regulator weren’t the only people irritated by npower’s words. The Government were aggrieved that npower said green taxes on energy bills would more than double by the end of the decade.
The Department of Energy and Climate Change spat back, saying ”npower’s analysis is incorrect on so many levels”, adding: ”A number of the policies listed by npower don’t have any impact on household energy bills, including the Renewable Heat Incentive, Climate Change Levy and the Carbon Reduction Commitment.”
Who do you believe?