Energy regulator 'won't act' on price rises
Posted on 14 January 2008 by
Energy regulator Ofgem has said that it has no plans to act to curb rising energy bills, even though the average household may soon be paying 75% more for its energy than five years ago.
Ofgem says that it has no concerns about anti-competitive behaviour in the UK energy market. However, an article in yesterday's Sunday Times says that the 'big six' energy companies "face questions over whether they have been engaged in 'tacit collusion'".
Allan Asher, chief executive of independent watchdog Energywatch, told the paper: "The energy companies should be fighting for market share, fighting for customers and fighting to offer the best value they can.
"But what they do is behave and price in almost exactly the same way."
In December 2007, British Gas and Npower both increased the rate of their market-tracking tariffs, while at the beginning of January, Npower announced increases of 17.2% for gas prices and 12.7% for electricity.
The hikes prompted Chancellor Alistair Darling to write to Ofgem chairman Sir John Mogg, asking why energy prices were rising so sharply. Energywatch called for the UK energy market to be referred to the Competition Commission.
However, an Ofgem spokesperson said: "Britain has one of the most competitive energy markets in Europe, with changing market share between the companies, price differences and good levels of switching.
"We keep markets under constant review but we can only take action if we find evidence of anti-competitive behaviour."
The Sunday Times says that the average household energy bill is "expected to exceed £1,000 this year, compared with £572 in 2003". This would constitute a rise of 75% in five years.
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