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 £1,300 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
