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What we can do now to make energy more affordable

The energy industry must improve in the long-term, but that doesn’t mean we should do nothing until then. We’re attending an energy summit to find practical things we can do today to help you save money this winter.

Have you put your heating on yet? It’s starting to get cold and many are reaching for the thermostat. But with rising energy prices, many will be holding off in fear of ever increasing bills.

Energy prices are the number one financial concern for consumers. You might have noticed that at Which? we’ve been turning up the heat on energy companies recently – getting more affordable energy is your priority and so it’s ours as well.

Getting round the table

Tomorrow Which? is attending a very important energy summit. The government, consumer groups and suppliers are all sitting down together with one shared goal – to work out what we can do to help consumers right now.

We want to see how to help those who are struggling to pay their bills, people who might never have switched or be confused by tariffs, and people who are worried about putting their heating on in October because they’re nervous about the impact on their pocket.

I’m hoping that the summit will give us some real, practical solutions that can be implemented straight away. I’m looking forward to walking out of that meeting with commitments from everyone around the table about what we can do together to ease the pressure before things get too cold.

There are longer-term problems

Of course, there are lots of problems that will take much longer to solve. We must encourage more competition in the market and make sure it delivers genuine value and choice for consumers.

The energy summit is just one of the first steps on the long road to a better energy market. We’re going to be there at every step – tackling confusing tariffs, exposing poor energy advice, and working with the government and Ofgem to instigate the change that you want to see.

But, in the meantime, we don’t want to tell you to hold on and just wait until all the problems have gone – that’s not realistic. We know there are things that the energy companies, the government and we at Which? can do right now. For instance, encouraging switching, making sure you’re on the cheapest tariff with your current supplier, and giving you clear information about how to save energy before the winter sets in.

I hope that after Monday’s energy summit you’ll have the right tools to save money on energy straight away. Not in two, five or ten years time – but this winter, in time for Christmas.

Comments
Guest
susan braddock says:
17 October 2011

I am really confused about the £120 rebate on electricity bills which has been proposed for this winter. I have established that if you are a pensioner on pension credit guarentee, then all the energy companies will offer this rebate automatically. However their have been reports, particularly on BBC Breakfast TV that this scheme will be extended to people with young children, and the disabled, on low incomes. But even the government spokesman being interviewed last week couldn`t give any details of what criteria will be used to identify such groups, and this is really important as unless you are a BG customer you will have to identify yourself and claim it. Apparently all the energy customers apart from BG will be allocating this rebate on a first come first serve basis, with the funding coming from the energy companies themselves. Although the government clearly hope that the other energy companies will fall in line with BG there is no guarantee that this will be the case. I emailed my MP, Mike Hancock (LD Portsmouth South) last week asking for answers, and he has sent back a standard, you will be hearing from me reply, but no actual info. I need to know whether it is worth changing to BG. I phoned up my energy company EON on the day the story broke, and their customer services didn`t know anything about it. Chris Hume is on Breakfast in 2m. I`ll see if he has got any answers.

Guest
Kay Rowham says:
17 October 2011

Energy Prices could be reduced by about 20% at a stroke by the Government if they were to cancel additional ‘green taxes’ that Ed Milliband introduced when Labour was in power. It’s the elephant in the room no-one wants to talk about.

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Guest

Yes Kay, you are so right.
I also don’t see why, through my taxes and higher fuel bills [minimally offset by the winter fuel supplement], I have to subsidise my wealthy neighbour who, purely by good luck since his house faces the right way, has been able to cover his roof with ugly PV panels and can keep the heating turned up at no extra cost to himself. A more inefficient process for transferring money around the economy, with businesses skimming it at every stage, I could not imagine.

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Guest

Hi all, thanks for joining in. I’m going to ask one of our energy experts to come in and deal with individual questions, but in the meantime if you want to see our first news and reaction to today’s energy summit we’ve just put the news on our website:

http://www.which.co.uk/news/2011/10/government-must-ensure-summit-not-just-a-talking-shop-268434/

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Guest

100% agree with Kay ( rats she mentioned it before me ). That’s what 25% reduction on the average bill. The government can find money for foreign aid and another war yet they’re making the end user pay for the Green Tax. I’m sure if they looked hard enough and cut waste from things like the NHS and MOD. (£32 for a loaf of bread etc, a few billion in scrapping this and that) the government could fund it themselves.

And I wonder if they’ll come up with exercise equipment u can use to generate electricity, kills 2 birds with one stone.

Guest
susan braddock says:
18 October 2011

The energy minister Chris Huhme didn`t even mention the scheme, even though he was on there to discuss ways of customers reducing their bills. Still haven`t heard from Mike Hancock, might go and see him in person.Good article posted yesterday on thismoney website on this scandle.

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Guest

I have been reading Ofgem’s factsheet, “Simpler energy tariffs”. It gets off to a good start with a simple graphic comparing the current complex situation with a graqphic of “Under the New Proposals”. The latter I believe reflects the Which? position of one standing charge plus one tariff. So far so good. However on the next page of the factsheet Ofgem then refers, in addtion to the Standard tariffs, to “More innovative tariffs” and sets out proposals for these. In other words, it will still be freeplay for the energy suppliers to dream up endless different alternative tariffs. I don’t think Ofgem is listening.

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Guest

I agree with the concensus of comments so far about “green tax” on energy bills being wrong, but perhaps for different reasons.
We do need sustainable energy and to develop this there is a cost to be paid, but it is really everyones problem and the money should come from general taxation and not by placing a levy on our gas and electricity bills.
Here’s an example.
The little old lady living on a fixed pension which reduces in value by the day is paying through her energy bill some of the money which goes to line the pockets of those collecting the feed in tariff from their PV panels. They are getting a good return, she is have to decide between a warm house and lunch.

Guest
derek turner says:
6 November 2011

The energy problem could be eased if our energy companies started invested excessive amount of money taken from us all in the form bills of etc
And invested into worth while projects like using our big fast flowing rivers to generate electricity
Just think how many times the big fast flowing rivers, could have worth while generators installed in them with out destroying the countryside And don’t forget this water is flowing continuously and the energy is not be used.
Rather than wasting billions of pounds on useless wind turbines and in some cases not even doing a survey to see if the area is suitable and of course if the wind blows.
And of course the big one has to be start investing in cold fusion that has to be the way forwards even far better that nucular power

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Guest

Very interesting Panorama programme recently in which it was argued the Government policy on energy might well be flawed.
In the race to reduce national Co2 levels an absolute fortune is being spent on offshore wind farms. This of course ends up having to be paid for by us the consumers and although wind power works it’s not cheap and not reliable.
The Panorama conclusion was that Co2 targets could be met by initially converting quickly from coal to cleaner gas (where we haven’t already) and by then more slowly bringing on nuclear and alternatives.
This it was argued would enable 2020 Co2 targets to be achieved without hitting consumer energy bills anything like as hard as the current approach.
Might be worth “Which” finding out more about this?
It could well help shape future “Which” campaigns?
Better I’d suggest than all the hot air about switching, tariffs and “competition” (or the lack of) none of these will make anything like as significant a difference as Government getting policy right.

Guest
derek turner says:
13 November 2011

Hi folks
We can all moan (This includes myself) forever and ever about fuel prices but as long as we have governments who openly support foreign owner ship of our own energy companies these companies that have already been set up out of English tax payers.
and don’t forget many back pockets are being are being filled many times.
So you may think we can alter things but truthfully we never will as long as all the above keeps taking place
dirk

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Guest

The government could reduce the cost of gas and electricity at a stroke by reducing VAT to zero. EU directives prevent them from being exempt from VAT. One of the “advantages” of being a member of the EU! A further reduction of two to three hundred pounds in gas and electricity domestic charges per year could be achieved by cancelling all the present uneconomic green carbon agenda and subsiding wind power, but this would again be contrary to another “advantage” of being a member of the EU.

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Guest

Sorry for the delay in responding to a number of the comments on this Conversation about what is driving energy price rises. A number of you have commented about the impact of green taxes on our energy bills and asked for Which?’s position on this issue and I thought it might be useful to give you a brief summary of our views.

Which? wants a market that provides energy for consumers at a fair price now and in the future. At the moment, the energy market does not serve the consumer well and that has to change. Furthermore, significant investment is needed to renew our energy system. While Which? is not an environmental charity, we recognise that our energy system does need to be sustainable. Fossil fuels will not last forever and burning them to produce electricity has negative impacts on the environment, including contributing to climate change.

Nevertheless, the investment needed in our energy system must be made in the most cost effective way possible. Consumers cannot be expected to write a blank cheque – and it was for this reason that Which? supported the Government’s decision to cut the Feed in Tariff (though we have concerns over the particular process and timings of the cut).

Furthermore, with levies supporting the Government’s environmental and social agenda also adding costs to our bills, we need much more transparency about how much these programmes add to our bills and how this money is spent by energy companies. At present energy efficiency measures make up around 10% of our electricity bills and 3% of our gas bills and with changes to these initiatives in the next year much greater scrutiny is needed.

Finally, it is important to recognise that gas is an important source of flexible power in the UK and is likely to remain so for many years to come. It produces around half the green house emissions of coal. However, the wholesale price of gas – not green energy and energy efficiency levies – has been the single biggest driver of the recent cost increases in energy bills. Gas is such a key driver of energy bills is because it comprises about 50% of all generation in the UK and sets the price of electricity. Global demand for gas is increasing and we are now a net importer, so there are some benefits to reducing the level of our dependence gas.

As the Government considers the future of our energy generation through its White Paper on Electricity Market Reform, we will continue to scrutinise these issues to ensure that consumers are not penalised in the future. We will therefore continue to listen to comments like those posted in this conversation and seek to address them in our ongoing policy work on this important issue.