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Calls for greater transparency on energy bills

Energy UK Chief Executive Speaks Out

Angela Knight, chief executive of Energy UK, has called for greater transparency over energy bills.

She believes energy companies need to be more open about what they charge their customers.

Speaking at the Energy Live 2012 conference in London, Knight said: “the proportion of our bills that is made up of the electricity and gas that we consume is falling. The rest of the bill is made up of other elements, many of which are outside the control of the energy companies.

“These include network charges and the increasing cost of public policies such as environmental and social obligations. All authorities involved in the energy agenda need to step up to the table of honesty and transparency.”

What different costs make up the energy prices you pay?

The actual energy is only responsible for just over half of the price you pay. The rest is made up of the cost of getting the energy to you, measuring how much you use, paying for government initiatives and the suppliers’ profits.

Knight is trying to take the heat out of the pressure on her constituents, the energy suppliers, and this is a sensible approach in the current climate. However there is a sense of the disingenuous here when you consider that her major constituents are the Big 6 energy suppliers who are what is known as “vertically integrated”. That is that their ‘groups’ own the supply business, generation and even the networks and meters. Whilst these are ‘disconnected’ in commercial terms, their value rises to the overall group. As a result it is a bit rich to suggest the average Big 6 energy supplier is exposed to external factors when compiling their price.

The Big 6 are also pushing for the publication of broker or TPI commissions on their customer’s invoices. This is an interesting call, similar to Knight’s, it is under the guise of customer transparency but really is about self justification for the supplier. The Big 6 would like TPIs such as Business Juice to be forced to declare the commission we earn for placing a client’s contract with a supplier on their invoice. In doing so the Big 6 hope it will cause customers to walk away from TPIs and contract directly with suppliers. Suppliers being confident in the knowledge that once the TPIs are ostracised they will have free reign to return to the good old days when suppliers could charge customers whatever they wanted free in the knowledge that there would be no TPI driven free market to keep a handle on prices.

Headline grabbing commitments underpinned by dangerous traps. Angela Knight’s previous role? Chief Executive of the British Bankers Association.

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