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
www.energyadviceline.org.uk
