MPs have criticised the way energy companies communicate price rises with their customers, causing ‘deep mistrust’. Do you know what’s actually causing your energy bills to go up?
The report by the House of Commons’ Energy and Climate Change Committee added that energy companies were not being as competitive as they ought to be, and also called on the energy regulator Ofgem to ensure bills are made clearer.
The report backs up our findings – less than a quarter of people trust energy companies. The government and Ofgem must do more to rebuild this trust. Ultimately, people won’t feel confident that they’re paying a fair price for energy unless prices are simplified.
It’s also important that we can see exactly what we’re paying for – energy bills must be open, transparent and subject to robust scrutiny.
The cost of moving away from ‘dirty’ energy
This got me to thinking – what is it that’s pushing our energy bills up? By now the debates about profits and global gas price rises are well rehearsed, but I want to throw something else into the mix: the cost of weaning the UK off of carbon-intensive, or environmentally ‘dirty’ if you like, methods of generating electricity.
It’s not that I don’t agree that we need to find cleaner ways of generating electricity, I absolutely think we do, I just think we need to be honest and open about how we’re going to pay for it. The Committee’s report also criticised the levies on bills that fund environmental programmes, adding that it must be clearer as to what their bills are made up of.
Transparency, transparency, transparency
Over the past few years I’ve come to realise that there’s one watchword that needs to be said again and again in the debate about energy prices: transparency. We recently published a report about the challenge of ‘decarbonising’ the UK’s energy sector (PDF). One of the key recommendations was that the cost of this decarbonisation should be subject to the same levels of scrutiny as spending that comes directly from taxation. We want a regular and independent audit of how the money is being spent in the hope that better value for money will be the outcome.
Moreover, it should not be beyond the wit of energy companies to give a detailed breakdown of what we’re paying for on our energy bills. A bit more openness and transparency about what it is we’re paying them for would go some way to fixing the breakdown in trust that customers feel for energy companies.
Energy prices are at the top of the league table of peoples’ financial concerns, so I think we’re entitled to a bit more detail about those prices. Have you ever wondered what makes up your energy bill?
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