Energy prices are still too high
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Read the Watchdog report below - then print off one of the downloadable letters (at the bottom of this article), which you can send to your energy supplier to complain if you feel energy prices are still too high.
Energy prices
For most of last year energy prices have headed in one direction - skywards. Our monthly bills have increased by an average of 40 per cent and have been at their peak all winter. This is, of course, when we use the most gas and electricity. But what about now that spring has sprung?
Well at last, it's the news we've all been waiting for. By the end of this month the big six energy companies will have cut their prices on either gas, electricity, or both. Good news - but why is it that the most we'll see them come down by is just ten per cent? How much money is that really going to put back in your pocket?
Costs began to plummet
When your bills were rocketing, the big six told us it was because of the rising cost of wholesale gas and electricity and that there was nothing that they could do about it. But last summer those prices began to fall and in October the price of wholesale energy costs began to plummet. In fact, since then it's pretty much halved.
We used data provided by TheEnergyShop.com and created the two graphs below:
(Source: TheEnergyShop.com)
(Source: TheEnergyShop.com)
The first graph shows how much electricity actually costs the energy companies, and the second shows the same but for gas.
They both clearly indicated that the costs to the companies have been coming right down. After working out what they pay, we decided to add what we pay to the graph with a red line so we could compare the two.
The results were clear. As the price of the wholesale gas and electricity went up, so did the cost to us - the consumers. But once the cost of wholesale was coming down we didn't exactly see the same trend. In fact, we took our graph out to the public and had them guess where they thought the line showing the cost to the consumer should go. As you would expect, most people guessed the cost to us would come down with the cost to the companies but, unfortunately, they were wrong.
Not what you'd expect
The red line showing the cost to consumers hadn't gone down at all, in fact the gap between what the companies pay and what we do, has got even bigger. This is certainly not what you'd expect, as even the spokesman for the big energy companies told us in October.
Dr Garry Felgate from the Energy Retail Association told us that when wholesale prices came down the competitive market would lower gas prices. Yet, so far, the price cuts that have been made are pretty small. Shouldn't they have been bigger? Watch Nicky Campbell talk to Dr Garry Felgate in a live interview at the top of this page.
Audrey Gallacher, head of company performance from Consumer Focus, told us that they felt the recent price reductions by the energy companies were a disappointment and that there was definitely more scope for prices to come down this year because of the drop in the wholesale price. She said that the consumers want reassurance that they're not being "ripped off".
Many of you agree and when you see what the companies pay, compared to what we pay, the energy companies price cuts seem pretty measly. We know they're making big savings, so why aren't they passing them on to you?
We invited Dr Garry Felgate from the Energy Retail Association back into the studio to discuss this.
The big six energy companies' price announcements:
Npower
Npower announced on 16 March that it is to reduce its electricity prices by eight per cent from 31 March. This means that customers' electricity bills will come down by £43 on average.
They say that as a result of these new prices Npower's monthly direct debit dual fuel tariff is more than £30 cheaper than that of British Gas.
Scottish Power
Scottish Power announced on 19 March reductions to its gas and electricity prices effective from 31 March 2009. Prices for gas customers dropped an average of 7.5 per cent and electricity bills by an average of three per cent. They say customers will see an annual average saving of £54.
EDF Energy
EDF Energy announced on 13 February 2009 a cut in its prices for its standard rate electricity customers of up to 12.5 per cent. The average change is a reduction of 8.8 per cent. The decrease will take effect from 31 March 2009. They told Watchdog: "2.3 million of EDF Energy's 5 million customers will experience price deductions [sic] as a result of this announcement. Unlike BG, our vulnerable customers on our social tariff, Energy Assist, will benefit from this price decrease."
E.ON
E.ON announced on 12 February it will cut its electricity price by nine per cent for the majority of its residential standard, online and pre-payment meter customers, effective from 31 March 2009. E.ON has not announced a gas price decrease, but they claim on their press release that, on average, gas prices remain cheaper than British Gas' post-decrease prices.
Scottish & Southern Energy
Scottish & Southern Energy will reduce its prices for domestic electricity and gas customers on 30 March 2009. Average prices for electricity customers will fall by nine per cent and for gas customers they will fall by four per cent for all standard customers.
British Gas
Its standard dual-fuel and pre-pay gas prices fell by 10 per cent on 19 February 2009. Its online tariffs Click Energy5 will fall by 6.6 per cent and Click Energy6 by 3.6 per cent. Those who pay by monthly direct debit had their monthly payment automatically reduced on 19 February.
Downloadable letters
If you feel energy prices should be reduced further, print one of the letters off below and send it to your current energy supplier.
Click on the relevant letter in the list and the letter will open in a new browser window. Simply copy and paste from acrobat using the text tool to add your details and then print them off.
- Letter to British Gas
- Letter to EDF Energy
- Letter to E.ON
- Letter to nPower
- Letter to Scottish and Southern Energy
- Letter to Scottish Power
Lots of you have contacted us in the past to say the you prefer our downloadable letters in an RTF format. These are in the list below. While they are easy to edit, be aware that you may lose the format of the letter.
© MMIX~RS~q~RS~~RS~z~RS~15~RS~)
Comments
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Regardless of whether the energy companies decrease the prices of electricity or gas, those of us who have meters for our energy and pre-pay for what we use don't get much of a saving at all. Surely paying for our energy in advance should entitle us to cheaper energy and not end up paying MORE than those who pay quarterly!
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The majority of energy companies are owned by non-UK organisations, so they don't care about UK consumers, only about maximising their profits. A simple answer is nationalisation - hey, we're doing it with the banks after all.
Peter, West London
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We should all start a candle-light campaign in August. As the weather warms up, use minimal electricity and no heating, and try cooking on coal bbq's. The big companies will only care when their profit margins are affected...
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Has any one else noticed the prices are high in the winter when most fuel is used and the reductions put into place once the spring comes and therefore usage goes down.
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Pre pay meters are still high which means people who have to manage their money are paying more. I work full time but fell into arrears and was forced into the meter. We paid roughly £80 a month 18 months ago and now over £200 pounds for G&E. They dont care just aslong as the bonus is paid. When do we the consumer see the benefits? Have you tried to change energy companie? Its a farce.....
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Why bother having someone in as an Energy Company Rep if your just going to give them an easy ride, compare our prices to Europe, ask them to justify the timings of their price changes and the herd mentality. Yet all we get is a wet lettuce approach fawning to the representative. 10% whoopee he said we should be grateful and clearly Nicky Campbell is.
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It's interesting that wholesale energy prices had come down considerably by October 2008 and yet energy companies have waited until April this year to reduce prices. Funny how this is at the beginning of a low consumption period!
The prices aren't even going to come down considerably. What' the betting that towards the end of the summer prices will start to rise again? Just in time for those high consumption winter bills !
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i am disgusted with engery companies. and the goverment, for not pushing the companies to bring prices down quicker.. and all this talk about lower bills, they dont come into affect till mar/april. thats no good.. when the worst winter we have had in 10 years.. is over!!.. they did the same about 2years ago.. and i bet they will go up in nov 09.. no one mention this point.. we hardly use as much gas during the summer..
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Hi, I think lowering prices now is too late. Why have the energy companies been able to wait until the winter bills have gone out? We have just received estimated bills leaving us £550 in arrears, the real bills are going to be much worse as the estimates are way out so it will more likely be £800+. I lost my job last year and we have no money to pay this. It's just going to be impossible to pay it.
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Why did the Watchdog presenter allow the energy 'suit'get off so lightly, he said nothing outside of hie brief, indeed his appearance on the show was a insult to ALL energy users.
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I am on the British Gas fixed tarif and have been told in no uncertain terms that they will charge me a large penalty if I 'choose to move' so it is in my best interest to stay put, oh yes and my gas/electricity will not be going down and indeed they expect prices to be going up within the next 3/4 months.
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It's high time we saw government intervention, similar to that of petrol pricing. The energy companies should be brought to book over their artificially inflated prices. At the end of the day they will only kerb this unfair profiteering with direct legislation. Time for Gordon Brown and his team to get it sorted!
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With regard to the fuel prices, why does OFGEM exist? I work in the Post Office, where our management appear absolutely terrified of any adverse comments from our regulator. Surely OFGEM, who act for the public (don't they?) should have the same effect in the power industry. If they are toothless, surely someone should resign so we could get a regulator who could dop a job for us.....or are the Government too scared/cosy with the power companies to do anything?
Incidentally, wouldn't a cancellation of the 5% VAT on fuel have been a much better move than the 2.5% reduction in the top rate?
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i have a complaint about the way Nicky Campbell questioned [or didnt question] the reprsentative from the energy companies.Their was no forceful questions as to why the prices had not fallen in line with the fall in prices to the energy companies.The representative kept saying that prices would fall in April [by a small amount]and this answer seemed to be good enough for Mr Campbell
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It`s very good of the energy companies to reduce the prices(How many months has it taken?) at the time of the year when people will be using less energy due to longer daylight hours and warmer weather. I`ve no doubt that wholesale prices will mysteriously rise again in the autumn then watch how quickly the rises get passed to the consumer..........!
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I live in a rural area where there is no gas supply. All energy is dependent on electricity, therefore we use economy 7, particularly for night storage, but also to put on washing machine, dishwasher, hot water, etc and other electrical dependant things where possible. This has meant that we do 75 to 80 percent of our bill over the year was on night rate. From Jan 08 to Jan 09 that rate went up 130 percent, whilst at the same time new meters installed changed night time from 10.30 to 12.30 - 3.30-8.30 to 12.30-7.30 making it unpractical to do washing/ dishwaher/ charging/ drier etc so making the cost increase further.
The cost to us over the year must go up 100 percent, so their redution is laughable.
This will effect many people, some unaware of night meter time changes,
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Those of us who took expert advice and capped our Gas and Electricity will not get reductions until the time expires.
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I think we are forgetting we are living in a democracy. We desperately need this "idly stand-by" government to step in and put something in writing to say "any company that sells energy to a UK consumer can not charge more than, lets say, 20% of the current global energy priced"
Okay, I know I have no idea what % it should be etc but why should we suffer because we need heat and light. Let's let Gordon Brown pay for the energy companies bonuses.
Can the Watchdog crew create a petition...I know everyone I know would sign it.
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Very disappointed with the lack of pressure Nicky Campbell puts on representatives such as in this report. It would be a good opportunity to really grill them and get them to admit they don't give a damn. Instead we got a rather weak interview that largely went along with their PR man. What was the point? If Watchdog isn't about standing up for the consumer with people such as this - what's the point of the programme?
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Southern Electric increased fuel prices in August 2008 - gas by 29.2% and electricity by 19.2% in time for the high cost half of the year - so that they can reduce them by about 10% in the low cost half. How can they get away with this?
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Our EON dual fuel online gives lovely graphs that show that for January - March 2009 we have used about 25% more gas and almost the same Electricity as the same period.
Our bill for the same period 2009 vs 2008 has increased by 50%.
Now it looks as if there is a £35 (10%) reduction on Gas in the works. Boy am I jumping for joy.
Is it possible that the customers who couldn't afford the capped rates on offer a few years ago are paying for the losses the companies incurred on those deals?
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What a pathetic interview with the representative of the energy suppliers! Why didn't you confront him with the graph you had used as the basis for the programme and insist on an explanation? Instead Nicky Campbell told him what a good job he was doing. He must have been laughing all the way home!
Come on Watchdog you can do better than this!
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I was shocked at the kid gloves with which the presenter treated that little snake from the energy company. He asked some half hearted questions then utterly failed to press home the point.
He failed utterly to get a decent answer out of that pernicious little so-and-so on the subject of why prices had not come down in line with the reduction in wholesale price.
He then failed utterly to even ask why every wholesale price rise was passed on to the customer within days or weeks, and a MASSIVE HUGE PLUMMET in wholesale price has taken 5 WHOLE MONTHS and they have not even passed on a QUARTER of the saving.
Even more importantly we the consumers need watchdog to go out and find out from Ofgen why the energy market just isn't working...
When the energy market was created in its current form it was supposed to provide a better deal to customers through applying market forces such as supply and demand and competition between providers in order to make sure that the customer got the best deal.
I think we can all agree that the customer is not getting the best deal, all the customer is getting is thoroughly ripped off as per usual.
And to top it all off Watchdog's effort to stand up for our rights can generously be described as pathetic.
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The announcements that energy companies have reduced their rates is only an *average*
My electricity supplier is ScottishPower, and despite them advertising that they will reduce their electricity prices by 3%, there is no change at all to my tariff; standard (not fixed)E7, NSC tariff, Eastern Region.
I'm sure this isn't a unique situation. Dr Garry Felgate, who last night asserted that all customers will see reductions in their energy prices from next week was clearly mis-informed.
Customers should check their own prices with their supplier - they too may not even be getting even the minuscule discounts the energy suppliers advertise.
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Your questions to Dr Garry Felgate from the Energy Retail Association were avoided as I would have expect for somebody with a vested interest. There is absolutely no justification for this continued ‘rip off’ which is obviously underwritten by the Government as evidenced by their complete lack of action.
Where is the Regulator- OFGEM in this daylight robbery? They should be protecting consumers as their first priority and regulate the monopoly companies who run the gas and electricity networks, together with promoting competitive gas and electricity markets. They also should determine strategy, set policies priorities and take decisions on a range of matters, including price controls and enforcement. Yet OFGEM are funded by the very same licensed companies who they supposed regulate! How then can OFGEM be perceived as impartial and protecting consumers?
I would like to see OFGEM on your programme, have you invited them? If you have and they have declined, please name & shame them.
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Sorry Watchdog but it was a poor piece of reporting. A neutral stance would suggest a lot more variables need to be added to your graph:
1. The increasing costs of green energy and government taxing on both energy companies and consumers.
2. The level of investment these companies are ploughing back into improving an antiqated system whilst trying to reach government targets on renewable energy sources. Take a look at the number of these projects currently underway…
Other issues are:
1. Energy companies do a thing called hedging - this means they buy your wholesale gas and electricity in advance. i.e. what you use today would have been bought months ago. This effect means price rises are delayed and therefore so are price cuts.
2. The price goes up in winter as there is more demand, electricity and gas is more "scarce" therefore the wholesale prices go up - simple economics.
I understand the anger - strangely enough I pay bills too but I also actually understand what is a very complicated industry. Those with nationalistic feelings towards "foreign" company ownership should remember your Government sold off an industry it was struggling to run or find investment for.
To play devils advocate there is far more to this situation than is suggested by your blind profiteering argument.
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I enjoyed the comment about shopping around for your gas and electricity to get the cheapest price. What happens if like me you are from Northern Ireland and only have one electric and gas supplier? Do we just have to accept a high price because there is no competition?
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Wouldn't it be great if we went on strike against the energy companies and created a GREEN DAY in protest. If we all decided not to use electricity for just one day a year I'm sure they'd listen. If one man can stop war around the world called PEACE DAY then I'm sure disgruntled customers can at least bring out the candles at night and cook the day before once a year. I'm so fed up of hearing people complaining all the time but doing nothing . Who's with me? ;)
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We use pre - paymment meters and we get penalised for it. We have no debt on them we just prefer this as a better way to budget but if you compare company prices on monthly then compare pre payment the diffrence is shocking why do we pay more for paying ours up front ?? surely the cost of paypoint and the cost of DD is similar (and i know becasue i deal with paypoint in my job)i challenge watchdog to find duel fuel on pre payment thats cheaper than monthly DD
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We have been paying £95 per month by dd for propane gas from BP since we bought this property - a 3 bedroom bungalow in Aug 2007.Now BP have told us they want £228 per month to clear the outstanding amount of £952.84 extra they say we have used this winter, In February they tell us we used £24.77.a day!! this sounds unbelievable. They tell us they will charge for checking the tank for leaks but they say it's always checked when deliveries are made. On the web we can't get any price comparisons for propane gas.
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EON seem to be using another method of keeping prices high. They have now started working to a 12 week quarter. This of course allows them to use the higher rate tariff over a shorter period, thus making the average unit price higher. Moving the bill earlier by one week each quarter also reduces the number of direct debits credited, thus making the apparent deficit higher. My last two bills between them only showed five payments in six months making it look as though I owed much more than I did.
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Unfortunately British Gas omitted to mention that customers who signed up last year to their fixed price deal ( during last years rip off rises ) will NOT be entitled to share in the forthcoming reductions.
If BG are buying supplies on future contracts, they too benefit from reductions in supply costs.
consequently they are making a profit out of these people.
I know I can switch ( though I don't know if a penalty charge exists ), but that detracts from the point.
Companies like utilities know they have the customer at their mercy. No lessons are being learned in these times from exploitation or any form of loyalty.
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Dr Felgate indicated that we can expect to see energy prices fall in April. If the major suppliers all reduce prices at the same time as he suggests, then there has been collusion between them to fix prices so that they act in unison. This is completely illegal and we should ask why the industry watchdog hasn't picked this up.
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Total greed as always from the energy companies. No doubt despite what the companies say they will post record profits again. It's about time the government took some real action to control these crooks.
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We rang BG yesterday to ask when our bills will be reduced, explaining how Dr Felgate had been on the programme and what he had said.
The BG customer advisor was bewildered, saying he didn't know who this man was and how he could go on TV and make such a statement! He then said because we pre-pay anyway we don't have a bill! (Yes we do)
He said we are not on a pre-payment meter we are on a credit meter! What is the difference?
Is this just another excuse for them not to reduce our payments/bills?
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Government will not do anything. Energy costs go up too much but so does council tax (over 123% since 1993).My gas and electric still costs a lot less than my council tax but at least I feel the benefit.We just need to remember why this is called 'rip off britain' and that we are expected to just grin and bear it.
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we had no choice in july 008,when energy firms stated we have no choice it
is,nt our fault its the price of oil that controls
the price of gas.in july a
high of $147 after 9months
today less than 50% at $52.5 for crude oil? so why
have'nt we had a proper decrease in our excessive
energy bills.we need action
now not later.
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I think Watchdog has run its course and should be terminated given the lilley livered approach by Nicky cambell and his associates. So how do the great British public get there voice heard when the Government are in denial and treat us like faceless cash cows!
One programme that does not appear to have been devalued is Rogue Traders so why not let Mat and his motor cycle mate loose on the Energy companies, after all they are dishonest rogues who should be brought to book!
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I have worked for energy companys for a while and with a good view of the price reduction i can confirm that the cut in price is not for all areas only the most expencive areas in the uk the likes of the midlands area is not going down in price for most why is this???
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Southern Electric prices increased by over 50% in 2008 and now they are saying they will reduce by 9%? I am underwhelmed! I am on Economy 7 and there is no gas to my house, so I have to do everything on electric. The ratio of Day to Night rates has also changed, as well as the length of "night time" on the night rate, so they are hitting us all round. All the time we are being told to reduce carbon emissions, make our houses more efficient, etc, so people do as they are told and put in more insulation, and so on, but who does it benefit? Not the poor householder, that's for sure. When is someone going to do something about the profiteering racket going on with the utility companies, councils, petrol companies, government all taking their slice? We work harder and harder, and all that happens is that we end up paying out more and more for less and less. Depressed, exhausted and broke of Wiltshire.
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Congratulations to Scottish Power's Marketing team! In the press their prices are coming down around 10% and we could save £54 quid a year.... Well, just got my new rate based on online readings, Direct debit payment, and wait for it, after going up over 40% the rate is coming down 0.3%, fixed till September 09. Only 'Standard' payment custmers (pay quarterly) get the full benefit. Smooth move guys.
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I don't know if its just me, or has anyone else noticed that electricity prices have increased not decreased from March 09.... they seem to have brought down the first 225kWh (minimally), but have massively increased the remaining kWh, so you are not saving at all, but its costing you more. I'm with Scottish Power and I've had a breif look at other companies and they seem to be doing the same thing. Are they increasing the electricity prices to make up for reducing the gas prices (which are still high)?
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I have sent the downloadable letter to NPower three times - ZERO RESPONSE?????????
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