Energy suppliers told to highlight prof its on bills as prices keep rising
ENERGY companies should spell out to customers how much of their bill amounts to profit, a minister has suggested as she condemned “completely unacceptable” price rises.
Claire Perry, the energy minister, said that suppliers should include more detail on their bills to help “nudge” customers into getting better deals.
In an interview with The Daily Telegraph Ms Perry called for the end of the dominance of the “big six” energy companies and said she wanted to see as many as 20 major players in the market.
It comes after British Gas announced this week that 3.5million households on its standard variable tariff will face average price hikes of £44, the second rise in six months.
Ms Perry accused the company of attempting to maximise its profit margins before the introduction of the Government’s price cap at the end of this year. The company has blamed increasing wholesale prices.
She said the Government wants energy companies to put more information on their bills so that customers can make better choices about their suppliers. Ms Perry supported calls for energy companies to provide a breakdown of costs on bills, including wholesale prices and profit margins. “Sunlight is a great disinfectant, transparency is a really good thing,” she said.
She said her own supplier, a challenger called Bulb, includes average energy use for similar households. “The idea is about making you feel part of the community,” she said. “I’m quite interested to know how my energy usage compares to my neighbours.”
She warned energy companies that they have not done enough to “earn” their privatised status. She said: “When we privatised the energy companies we gifted them incumbency. They didn’t have to earn it. Some of them have risen to the customer service challenge. Others have taken longer.
“The thing that has troubled me most is that it’s our mums and dads who might get stuck on a tariff. You know you have a group of people who are less likely to switch who are on the highest SVT tariffs. I think it’s completely unacceptable. I’ve told Iain [Conn, the head of Centrica] face to face. It’s trying to maximise margin ahead of the price cap. Ultimately consumers can choose to switch.”
She warned that energy bills could rise after Brexit if Britain leaves the “internal energy market”, which aligns rules and regulations on energy across the European Union, adding that it is still “part of negotiations”. She acknowledged there have been issues with the roll-out of smart meters amid concerns that up to one in 10 of them are going “dumb” when people switch suppliers.
However, she said that the problems will be fixed by 2020 and that the rollout of a new generation of smart meters is under way. It came as Citizens Advice said the deadline for the Government’s smart meter roll out must be extended by three years. Energy companies were told to install 53 million smart meters, which display energy usage in pounds and pence and send automatic readings to suppliers, by 2020.
The £11billion roll-out is meant to reduce energy usage and save consumers money by changing the way households use appliances.
However, the British Infrastructure Group, a panel of MPS, reported last month that the average annual saving from having a smart meter is just £11.