Energy firms ‘overcharge by £3.7bn a year’

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Some of Britain’s biggest energy companies have been accused of raising households bills for no reason and systematically overcharging customers by £3.7bn a year as they were grilled by MPs over their soaring prices and profits.

They were taken to task by Stephen Fitzpatrick, the chief executive of small supplier Ovo Energy, who launched a stinging attack on his larger rivals for being “the best filibusters in the business” when it comes to revealing how they make their money.

After British Gas, npower, SSE and Scottish Power announced inflation-busting increases in household bills, Fitzpatrick said he “cannot explain any of these price rises” as his company is buying gas for 7% less than it was two years ago.

The four companies that have raised bills in recent weeks are under increasing pressure to justify their higher prices after figures from the regulator Ofgem showed that network costs have risen by just £15 since last year, wholesale costs by £10 and green costs by £10.

During the hearing MPs criticised the companies’ executives for accepting large bonuses while putting up prices year after year and failing in their duties to protect poor households who have to choose between heating and eating.

John Robertson, a Labour MP, warned that thousands of people were dying of hypothermia because they could not afford to pay their bills. He dismissed the companies’ claims that they do not disconnect customers by pointing out that those who fall into debt are moved on to prepayment meters which in effect force them to “self-disconnect”. “The big reason is they die of hypothermia and they can’t afford to keep the heating on. By the time you have gone to look for them [after 30 days of no energy] it’s too late,” he said.

via Energy firms ‘overcharge by £3.7bn a year’ | Business | The Guardian.

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