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Energy costs and the price comparison websites

british energy costsThere never seems to be much good news coming out of the energy industry, and this month’s no different.

The price comparison sites and industry commentators are almost tripping over themselves telling us that energy bills on an inexorable rise and suppliers totally unreformed and that price rises are the responsibility of all market players.

The first of the price comparison websites out the blocks came Which? who reported figures from the Office for National Statistics (ONS) that found spending on energy had increased by 52% above inflation since 2003-04.

Not only that but DECC reported that energy consumption fell by 17% over that same period placing the increases in even more stark contrast.

Executive Director of Which?, Richard Lloyd, said:

“At a time when rising energy prices are consumers’ number one concern, it is shocking that people are paying more despite using less. That’s why it is all the more urgent that regulators and government act to give consumers confidence that the price we are paying for our energy is fair. Major reforms are needed now to restore trust in the industry and to guarantee fairer energy prices for consumers.”

Whilst Shadow Energy Secretary, Caroline Flint, said:

“Under David Cameron’s government, Britain is facing an energy bill crisis…. Labour has already set out radical plans to freeze energy prices until 2017…. and fix the energy market for the future, with a tough new regulator to curb rip-off bills”

Hot on the heels of Which? came uSwitch, the venerable beacon for concerned consumers who announced yet again that energy suppliers were the purveyors of the worst bills for clarity despite the regulator, Ofgem, bringing in much vaunted changes in April this year.

However uSwitch’s research found that:

  • Only 30% of those surveyed said their energy invoices were now easier to understand
  • 53% said they had noticed no change or improvement, and crucially
  • 51% said they had failed to recall seeing promised cheaper tariff information on the invoices

uSwitch’s Ann Robinson said:

“While it’s encouraging that a third of consumers say their bills are easier to understand, the majority are still having difficulties getting to grips with them. The findings clearly show that Ofgem must look again at the effectiveness of their reforms, and work with consumers and suppliers to produce a bill format they can understand.”

However the price comparison sites themselves, such as uSwitch and Which? didn’t escape criticism with the claim that is was their services that added a critical premium to the cost of energy and who were complicit in the rising bills.

David Hunter, an Energy Specialist at Schneider Electric, said:

“One supplier estimated that hidden commission makes up 7pc of the bill on top of supplier profits, yet it is hidden under the radar.

“These murky costs are spread across all customers – whether or not you use a broker – so there is no avoiding the surcharge even if you compare the market yourself”

Following on from The Big Deal’s “outing” of alleged dodgy practice amongst the countries biggest price comparison websites clearly no one is in the mood for good news.