£200 can be saved by switching alone

The Energy Advice Line has welcomed the findings of a top-level probe that has found consumers can save around £200 a year by switching energy supplier.

But Julian Morgan, managing director of the price comparison, switching and advice service for energy users, said it was crucial for the government to work out why some consumers were failing to switch, thereby losing out on savings.

An analysis of energy bills by the Department of Energy & Climate Change’s (DECC) Domestic Fuel Enquiry has found that 13.5 million households in the UK are losing out on a total of £2.7 billion by staying loyal to their supplier.

What is the Feed in Tariff?

Consumers shopping for cheaper business electricity rates should ensure that they compare like-for-like tariffs following changes in the way some suppliers itemise their bills, according to the Energy Advice Line.

Some customers could be signing up to deals unaware that a Feed-in Tariff (FiT) charge was payable on top.

Network charges make up 25% of bills

The Energy Advice Line has urged Ofgem to investigate network costs as a matter of priority in a bid to improve competition in the UK energy market and deliver lower prices to consumers.

Julian Morgan, managing director of the price comparison, switching and advice service for energy customers, said the costs were a significant factor in domestic and business energy bills and needed to be tackled.

The energy watchdog, Ofgem, has come under fire from MPs for failing to crack down on the energy distribution and transmission costs charged by network companies and passed on to consumers by suppliers.

MPs said the price caps intended to keep the costs down were too generous, and network costs were now a significant and overlooked factor in high bills.

Mr Morgan said the average dual fuel bill now cost more than £1300 per year, with network charges making up almost a quarter of the total. Ofgem needed to do everything in its power to reduce the effective monopoly enjoyed by network companies such as National Grid, Scottish and Southern Energy and Northern Power Grid, he said.

“Ofgem claims it will take eight years to see whether value for money is being delivered to the UK energy market as a result of its regulatory reforms but this is too long for hard-pressed consumers to wait,” Mr Morgan said.

“It needs to put pressure on both network companies and suppliers to reduce these network costs and pass the savings on. There is ample room for customers to enjoy much better value for money.

“The system is also too complex and confusing for consumers, with prices varying around the country and many people very unsure about what these charges are actually for.

“It’s time Ofgem used its regulatory muscle to force energy companies to bring these charges down and it make this aspect of energy bills simpler.”

MPs have asked Ofgem to investigate the feasibility of a national tariff to simplify charging and make prices less volatile, and called on the government to do more to encourage smaller generators to enter the market to increase competition.

“While there are some things that consumers have no control over, like network charges, they can do what they can to keep their bills down by shopping around and switching supplier to make sure they’re on the lowest possible tariff,” Mr Morgan said.

The Energy Advice Line is one of the UK's leading price comparison and switching services for business and domestic energy customers. It is also an advocate for energy market reform and has campaigned for a better deal for energy users, including calling for a ban on cold calling and changes to regulations to make it easier for all consumers to switch suppliers.

The service is completely independent and free. Consumers can quickly and simply search the market for the best available energy deals from an extensive panel of small and large energy suppliers. The service also offers a free advice line for business energy customers.

For further information visit energyadviceline.org.uk

SMEs are neglected by the energy industry

The needs of small and medium sized enterprises (SMEs) are being neglected in the overhaul of the energy market, according to The Energy Advice Line.

Julian Morgan, managing director of the price comparison and switching service, said SMEs needed the same protection against energy suppliers as householders, but were being left to fend for themselves.

Mr Morgan said the Government and Ofgem expected small firms to have the same expertise and resources to deal with their energy requirements as the largest organisations.

"The fact is that vast numbers of small businesses are run by one or two people," Mr Morgan said.

"These people are protected and prioritised as domestic energy users, but are left to fend ofr themselves when they leave the house and walk into their office each day. It's not fair.

"Long and complicated energy contracts, unexpected charges, no cooling off period when they enter contracts and no protection from unreasonable price hikes are just some of the problems SMEs have to deal with on their own."

The Competition and Markets Authority (CMA) has been investigating the energy sector for the past 10 months and is consulting on proposed reforms after concluding that households and businesses were paying hundreds of pounds too much each year for their gas and electricity.

Initial proposals for reform, published in the summer, included controversial plans to impose a temporary regulated 'price cap' on all domestic standard tariffs. But businesses have been left wondering whether this will be extended to them.

"I would like regulators to step in and extend the same protections to SMEs as they do to domestic customers," Mr Morgan said.

"The CMA last year reported that extra charges applied to businesses totalled an estimated £100m a year if they didn't switch - but suppliers don't make it easy to do this.

"We help countless firms switch and find the best deal, but they are still struggling with lots of others issues including long and complicated contracts, unreasonably high standard tariffs and no cooling off period after they've signed up to a deal.

"All these areas need urgent change."

The Energy Advice Line is one of the UK's leading price comparison and switching services for business and domestic energy customers. It is also an advocate for energy market reform and has campaigned for a better deal for energy users, including calling for a ban on cold calling and changes to regulations to make it easier for all consumers to switch suppliers.

The service is completely independent and free. Consumers can quickly and simply search the market for the best available energy deals from an extensive panel of small and large energy suppliers. The service also offers a free advice line for business energy customers.

For further information visit energyadviceline.org.uk