Saturday, 12 October 2013

Energy price increases lead to a winter of discontent



It is that time of year again, plastic pumpkins nestle alongside witches hats and recipes for spooky soup in the supermarkets. Caravans are cleaned and put under cover until next season. Inflatable lilos and swimwear are all reduced down by 50% and just as we start the debate about turning the heating back on, the announcements for the fuel increases begins. The first of the Big Six to fire the warning shots was SSE with an 8.2% increase from 15 November. This is the same SSE whose pre-tax profits for the whole group were declared at 1.4 billion back in May. SSE are only too keen to point out that the majority of the price increase is down to government levies, which are 13% higher this year, plus delivery costs to households hiking up by 10% and the cost of the wholesale fuel, rising by a mere 4%.

Consumers patience and their pockets taxed to the limit

SSE want to see these levies taken out of the billing process and added into our taxation costs. The Energy Minister and current government think otherwise and so the ping pong game commences as neither want to be seen as the “bad guys” in the fuel poverty scenario. Out of the 13% levy, around 11% goes on government programmes to tackle climate change, reduce emissions and save energy, according to the energy regulator, Ofgem.

Moving to cleaner and greener energy is essential and ComRes when carrying out research recently found that 67% of energy users were more than happy to have wind farms in the area where they live. What most bill payers cannot accept is the stranglehold that the Big Six companies seem to exert over energy consumption in the UK. Nearly 70% of individuals in the ComRes survey want to return to nationalisation of the energy industry, with around 80% stating that energy prices are set too high.

It is interesting to note how each of the companies aim to attract and retain your custom, and this was highlighted only this week by a colleague who is trustee for a local organisation in the near vicinity. The contract for energy supply is due to finish at the end of this year for two buildings he oversees, and the accountant had received details for the forthcoming increase with the existing energy company. Their consumption of energy remained about the same each year, yet the price increase for both buildings were 42% and 56% respectively. So he gave notice to the current supplier and informed them he would be looking elsewhere. The present supplier came back with an increase of 1.5 and 1.8% for both buildings if he remained with them.

Fuel poverty on the increase alongside energy company profits

We get the fact that we cannot keep burning fossil fuels and need to tackle change, not just for ourselves but for our children and their descendants. We have insulated our lofts, double glazed our windows, turned down the thermostat, moved over to wood burners, and I personally have offered to snuggle down with George Clooney to keep him warm. However, we won’t stand for seeing large profit making corporations make money, whilst fuel poverty is on the increase.

We don’t need fancy and expensive marketing to attract our custom, or expensive seminars on green deals and energy consumption. Just an honest broker with a transparent method of pricing, which could be a community controlled enterprise meeting the needs of the householders and the environment, or reverting from privatization back to the nationalized industries. What do you think?

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