September 16, 2011

Bingo – It’s a Full House!

Filed under: Business Electricity — Tags: , , — Newsroom @ 10:04 am

We now have a full house, as EDF has just announced its increased prices; the last of the big six energy providers to confirm their figures.  Electricity has risen by 4.5%, in line with inflation but gas has a huge hike of 15.4 per cent.  This latter figure, although enormous is actually lower than the other major players.

Those EDF customers who have a duel fuel agreement will see their energy bills increase by approximately 33p each day which equates to about £120 per year.  These increases are bound to cause further problems for their customers who are already struggling to pay their energy bills.

It really is dreadful to advise that 15.4 per cent is the lowest price rise of all of the major energy providers.  We know that these companies have their own problems – doesn’t every business.  The difference is that if small organisations increased their prices by anything close to this figure, clients would, without any doubt at all, walk away.  A small company providing first-class service and products for a long time and whose clients know the brilliant work done by them, will find it extremely difficult to persuade their clients that a 15% rise is justified.

At a time when many UK businesses are reducing their prices to ensure that their clients remain, it is impossible to comprehend the actions of these energy providers.  Their customers, both residential consumers and business owners can’t afford these increases.  The majority of households and small businesses haven’t had an increase in their income for some years now and there certainly aren’t expectations of windfalls in the near future.

The problem is that these companies have us all over a barrel.  They know that every home and business require electricity and gas in order to keep functioning.  It may be possible for a rural property and occupants to manage without being connected to the mains for electricity – it isn’t practical for the remaining 99.99 per cent for the UK population to contemplate.

There is a wonderfully romantic notion of the woman (or man) kneading the dough in readiness for making the daily bread cooked in one of the multi-fuel ranges.  The other partner checks that the windmill at the top of the field is generating sufficient power so that the radio can be switched on.  They then wander to see if the generator has enough fuel for another few weeks.

This is the position that many UK families would like to imagine themselves in – however; the problems outweigh the benefits.  The cost implications are excessive and so for those families wanting to save on their energy bills the initial capital required makes it untenable.

Unfortunately, this brings us all back to requiring the energy providers to enable our homes and businesses to function.  As we don’t appear to have viable alternatives at this time, perhaps the Regulator needs to instruct these electricity and gas suppliers to keep their increases to a minimum – otherwise when all the exciting alternatives which are starting to be implemented are actually affordable – a large swathe of customers are likely to vote with their feet!

August 29, 2011

If They’ve Got It Wrong …Complain, Loudly!

Filed under: Energy News — Tags: , , , — Newsroom @ 10:05 am

With the news that the major energy providers have decided to increase their price to all customers in the near future, perhaps the question should be asked as to why these increases couldn’t have been revoked or at least capped.  Now that they have been announced and as the regulators are involved and studying these rises, perhaps they can confirm that if they are deemed excessive, that there will be a repayment, or at the very least, credit given against these latest round of price hikes.

During the past few months Ofgem has started fining energy companies when they feel the rules have been broken – or severely compromised.  British Gas were fined £1m in June 2011 for misreporting the quantity of electricity supplied and in July 2011 Ofgem fined British Gas yet again, this time the amount  was £2.5m, for not adequately responding to customer complaints.   British Gas have recently announced their half-yearly profits of £280m and just a few days later they confirmed they would be increasing their gas prices by 18 percent and also by raising their electricity charges by 16 percent.

Last week another of the major energy providers EDF admitted that they had overcharged 100,000 customers between 2003 and 2010 because of a fault in their meter reading system.  In many of these cases the amounts of money involved was fairly insignificant; however the fact that it took seven years before the discrepancies in the metering systems were noticed is fairly worrying.

These figures are just the tip of the iceberg with it appears, new and more disturbing stories being produced on a regular basis.  Although Ofgem are finally attempting to probe into the energy providers’ affairs, let’s hope that the reports which are currently being compiled by the specialist accountants appointed by them, lead to the energy providers in knowing that they have, in the future, nowhere to hide.  Genuine mistakes can, and will continue to occur, and no-one will criticise any company for making errors, as long as they are discovered promptly, apologies made to the injured parties and reasonable compensation given when it is deemed to be appropriate.

Ofgem should be aware of all disputes from the beginning and perhaps if the energy providers know they need to tell Ofgem about every complaint immediately it may encourage them to resolve the issue with greater speed.  There could even be a series of fines if the energy providers haven’t satisfactorily resolved the result within a specific timeframe.  Obviously, the more complex the problem, the longer the company should have in order to rectify it.  All disputes should be logged in a public forum, together with the outcome.

The reporting of instances involving malpractice or negligence need to happen as a matter of course, with some urgency and there should be a recognised timetable for the resolution.