We asked whether you knew what made up your energy bills. The discussion launched a debate about renewable energy, supplier profits and confusing bills. Here’s a selection of your comments.
In his Conversation, our energy campaigner Josh Green asked whether you knew how much of your energy bills were due to weaning the UK off of carbon-intensive electricity.
‘The subsidies to renewable energy generation should be explicitly identified on our energy bills. To do otherwise is dishonest.’
Vince P has no idea how much subsidies for green energy are adding to his bills:
‘There have been various references to the increase in our bills caused by subsidies for ‘green’ generation, but I still don’t know how much I’m paying for this, and what is the basis of calculation. I use electricity and heating oil (no gas in my village). Are these both subject to these additional environmental charges? These charges should be separate “line items” on bills – by agreement with the suppliers or by statute if they won’t provide this information voluntarily.’
Where do our energy payments go?
Malcolm R would also like to see more transparency from energy companies and government:
‘Ofgem publish an energy bill breakdown for an average consumer under six categories – between 58% and 67% being for fuel (Dec 2012) and 6-11% for environmental charges. I believe it would be useful if these categories were shown as £s on each consumer’s bill so you could see how your supplier uses its income.
‘The green energy component comes from government commitments and it is questionable how this is best paid for. As it, in principle, benefits everyone then it might be best if it came out of general taxation. However, since this would increase taxes – how popular would that be? – this is avoided by tacking it onto energy bills. Should we all pay in proportion to our bill – domestic, commercial and industrial users alike?
‘This green component is set to increase substantially. I would like to see how the government is investing this money. I am concerned about poor sources of renewable energy being heavily subsidised – on-shore wind farms, solar power, feed in tariffs.’
Energy company profits and price rises
The debate then turned to energy company profit announcements, with British Gas and EDF in the news last week. Richard Hart had some harsh words for the energy regulator Ofgem:
‘I’m a British Gas customer and am annoyed that yet again these utility companies are making huge profits yet still increasing bills. I think Ofgem should again look at the profits these companies are making and put a ceiling on how much our bills should increase. The higher their profits the least our bills should rise, but as we all know Ofgem is spineless and won’t do anything.’
Richard Scott comments on Centrica’s announcements last week:
‘The big news today is that Centrica (British Gas owner) made a 9% increase in its six-monthly profit this year, but they still do not rule out price increases this winter!
‘Ofgem needs to get a grip on these companies, who are pushing their luck – just like the banks – they don`t get it. There must be some way of curbing these excessive profits.’
We want the government and Ofgem to do more to rebuild trust in suppliers and to keep prices in check. We also want to see the government introduce simple pricing and ring-fence energy supply from generation businesses, so that you can see exactly what you’re paying for and be more confident that there is effective competition in the energy market.
Do you think energy companies could be more transparent about what it is we’re paying them for? What do you think about the latest profit announcements?