Executives from major energy companies came under criticism from MPs yesterday for not having passed falls in wholesale energy prices onto their customers, but they said that energy prices will fall soon.
Two of the largest energy providers – British Gas
and Scottish & Southern Energy – have already announced domestic gas and electricity
price cuts of about 10 per cent, but others have not confirmed when any cuts will take place.
Ian Marchant, chief executive of Scottish & Southern Energy, told MPs yesterday that he has "no idea" why many of his rivals have not also cut their energy bills
, the BBC reported. He added that while this is good for his firm, which can use this as an opportunity to win customers, it is not good for the consumer and other providers should therefore fall in line quickly.
Mr Marchant also noticed that the two companies to have made cuts thus far in 2009 are both British-owned companies, which could be significant.
Executives at EDF Energy
and Scottish Power said that they were "optimistic" that households will see their energy bills cut soon, but they were vague about the details of the savings and when these price cuts would be implemented.Scottish Power
chief executive Nick Horler said he was "very well aware that two of our largest competitors have set dates from which decreases will take place", according to the BBC. "We don't want to lose customers and therefore we are looking to move soon," he added. Npower
was non-committal about whether any cuts would be made at all, and Mr Marchant also warned that any further cuts might not be forthcoming. Rather, as wholesale energy prices remain volatile, he said that there could even be another increase in the next few years.
Energy bosses told the Energy and Climate Change Committee
yesterday that while domestic fuel bills are about 30 per cent higher than they were this time last year, wholesale energy prices have risen more – by 75 per cent in the same time.
Therefore, they said, energy companies are helping the UK consumer by not raising their prices in line with wholesale prices, as some other European firms have done, and are taking a hit to their profits.
Phil Bentley, chief executive of British Gas – the first company to announce price cuts this year – defended the company's position and rebuffed claims that British Gas is profiteering from its customers' hardship. The company only makes £2 profit for every £100 of a domestic bill, he said.
The suggestion that falls in energy bills could be limited was a "big blow to consumers", Mark Todd, director at Energyhelpline, told the BBC. Mr Todd estimates that 5.5 million UK households are in fuel poverty – whereby they spend at least 10 per cent of their income on heating their home – and warned that this level could "escalate". Compare energy prices »
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