Posts tagged ‘energy bills’

February 22, 2010

Poor paying for energy profits

Crippling energy costs hit the poor and elderly as companies cash in on cold weather

Households across the UK are facing record energy bills this month as a result of the recent freezing weather conditions. After one of the coldest Januarys in over 25  years gas and electricity bills are set to rise from an average £156 to £237 – a massive 52 per cent increase, according to official figures, with many people falling further into debt in order to pay.

The extreme weather during the first month of 2010 saw average temperatures slip below 3c with widespread heavy snowfall and sharp frosts across most of the UK. According to the Met Office the minimum temperature recorded was (minus) -22c. The extraordinary weather over the winter period is estimated to have caused a 30 per cent surge in energy consumption, as families and the elderly struggled to cope with the freezing temperatures.

Economically it means the UK’s 27 million households will pay out a total of £6.1 billion on their energy bills for the last month, an increase of £1.89 billion despite the decrease in the cost of fuel. Wholesale gas prices fell by 60 per cent during 2008/9, but the savings have not been passed on to consumers with customer bills being reduced by less than ten per cent. Critics argue that the major energy suppliers are waiting until the summer to bring down prices rather than risk a cut in profits during the peak energy consumption over the winter months.

The UK’s largest energy supplier, British Gas with 15.7million customers, is set for a 50 per cent rise in annual profits to more than £500million, while Scottish and Southern Energy’s profits rose by 36 per cent in the past six months. Thousands of elderly, meanwhile, have been unable to afford to keep warm during the coldest spell in 30 years. One energy expert commented “There is still scope for significant price cuts for both gas and electricity to ease the burden on hard-pressed households. A lot of people, especially the old, poor and vulnerable, were already struggling to pay their bills even before the sharp drop in temperatures and they need help.”

There were 36,700 more deaths among the elderly during winter than in warmer months, according to the Office of National Statistics, up 12,000 on the previous year. At the same time there are millions of pensioners among the 5.4million who are in fuel poverty. The Age Concern and Help the Aged charity condemned the rise in winter deaths, which it links to ‘cash-strapped older people turning down the heating’. Energy watchdog group Consumer Focus commented: ‘All of the suppliers will be enjoying rocketing profits while millions of consumers worry about how to afford to keep warm.’

The windfall for gas and electric companies comes on the back of an the energy regulators Ofgem critical report that found energy suppliers waiting 65 days after putting up prices before informing customers of the increase, leaving many in the dark over the true cost of their energy consumption.

Taken from Freedom

January 25, 2010

More families cannot pay their fuel bills

A combination of cold weather, high gas and electricity prices and mounting pressure on disposable incomes could see a substantial rise in the number of families falling into debt with energy companies, consumer groups are warning.

The alert follows a report by the energy industry regulator, Ofgem, last week, which showed large numbers of people getting behind on their gas and electricity bills.

Ofgem said that even before the winter began, more customers were getting themselves into financial difficulties. There was a 13 per cent increase in the number of electricity customers entering into a new debt arrangement with their supplier in the third quarter of last year, Ofgem said, and a 21 per cent increase in such arrangements between households and their gas suppliers.

In addition, the average level of debt of customers in difficulties was 20 per cent higher than a year previously, and there has also been a substantial increase in the number of people with debts of £600 or more.

uSwitch, the price comparison site, warned that regulators needed to take the issue of debt more seriously, but also advised customers to switch supplier more regularly in order to find the cheapest possible deals. One problem is that the customers most likely to get into financial difficulties also seem to be those who find it difficult to pay their bills by direct debit, an arrangement for which most suppliers offer discounted prices.

“The recession will have played a part, but Ofgem cannot afford to brush the cost of energy under the carpet. Energy bills are substantially higher – at £327 or more – than they were at the beginning of 2008, even after suppliers cut their prices last year, and this will have had an impact on the ability of many households to afford and pay for their energy,” said Thomas Lyon, an energy expert at uSwitch. “These debt numbers could get worse as we are in the middle of a bitter winter which could add an extra £60 on to our next quarterly bills because of the extra heating and energy we have all had to use – this will hit those who pay by cash or cheque particularly hard.”

Taken from The Independent