Energy cartel leaves us cold …

I’m watching Christine McGourty, a former journalist and now director of Energy UK, which represents energy suppliers, on the news. She sighs, perhaps with boredom, perhaps with frustration, on hearing complaints from customers about energy companies and rising costs.

It has been revealed by regulator Ofgem today that energy firms profit margins have risen to £125 per customer per year.

I wonder if Ms McGourty realises her unemployed former colleagues are struggling to meet the rising costs of fuel in the UK as she defends the decisions of the Big Six saying they had spent “£375m over the last three years helping vulnerable customers”.

Imagine how little £375m over three years compares to the profit they made in that time.

The Big Six are: British Gas, Eon Energy; EDF Energy; NPower; Scottish and Southern Energy; and Scottish Power. Organisations such as Age Concern, Child Poverty Action Group and National Energy Action have lobbied Government for change, stating that rising energy prices in these companies aren’t just about increased costs to suppliers.

The argument that suppliers need to be more competitive to ensure customers have a choice is a facile one.This is not about finding the budget company suited to your finances because all big six have all hiked their fees. This is no longer even about certain sections of society – such as the elderly – going without heating, everyone I know is putting off putting on the heating.

Big, ugly, money-eater

And it is not about rising costs of supplying gas and electricity because companies are making ENORMOUS profits. This winter will see people shivering in their homes, unable to use hot water, sitting in the dark while energy company shareholders reap profits from high bills and extortionate surcharges.

I wrote to my MP explaining what NPower had said to me about avoiding a cold winter by paying a debt for non-use of gas:

“I am fined for being too poor to put money on my gas meter. I know Chris Huhne has urged consumers to know more about the competition between energy companies but this is not about finding another provider – this is about ripping off the poor.

“The relentless financial attacks on the poor have to be tackled. I implore you and the Labour Party to look at this properly. The unemployed, middle-income earners, the low-paid and the poor need to be protected from the greedy energy companies who are making massive profits for their shareholders while the rest of us are left out in the cold.

“Surely any political party claiming to stand for social justice and reward for hard work can see how this issue alone needs to be tackled. It needs to be tackled properly and won’t be until people can afford heating and aren’t fined for not being able to afford heating.

“I, and many others, face a very cold winter both because of debts like this and the extortionate cost of heating our homes. Please do something about this.”

I then grudgingly used £10 from my £135 fortnightly benefits to top-up by gas meter card. Immediately £7 was taken for the debt for the unpaid surcharges, and £3 towards the emergency credit which I had already used.

This means I now have just £3 to use for the next eleven days, from a meter in the red: I still have a deficit of £3 and, until both the debt and emergency credit is cleared, will never really have access to hot water and heating.

I received a response from an NPower executive after writing to my MP. It reads:

“I understand your concern over the standing charge on your gas pre-payment meter and would like to offer my full apologies for any inconvenience caused in querying this matter.  We aim to provide the highest level of customer service at npower and take all complaints seriously.

“Having checked our records, I can confirm that the standing charge on your gas meter forms part of your tariff whereby a daily standing charge is paid via the meter and all usage is paid for at a flat rate.  Non prepayment customers are charged with the first 4572kWh per year charged at a higher rate, then all subsequent usage at a lower rate.

“Having checked your usage patterns over previous years, it can be seen that your gas usage averages 0.54 units per day (upd); 6335kWh per year.  On your pre-payment meter this gives an annual spend of £377.85 including VAT, whereas a non-prepayment (credit) meter would be slightly more expensive at £402.16 per year (assuming a Direct Debit in place and Dual Fuel Discount applied).

“I trust that this demonstrates that you are not being disadvantaged as a pre-payment customer and that although you must pay standing charge regardless of whether you use gas, this is still cheaper than a standard tariff customer with a credit meter.

“In future, you should ensure that your gas meter has credit available to collect the £2.51 weekly standing charge (34.2p/day, ex VAT).

“Alternatively, you may consider having your gas meter exchanged for a credit meter where no standing charge is paid.  However, I would suggest that this option is only undertaken on the understanding of a Direct Debit being in place to cover your average usage of £34.00 per month.  This includes the £100.00 Duel Fuel Discount you would be eligible [sic] for after 12 consecutive monthly Direct Debit payments have been made.  I would be happy to allow your standing charge debt to be incorporated into your monthly payment over 12 months – for illustration purposes, assuming your current standing charge of £51.69, this would be an additional £4.30 per month.  If you would like to take up this offer, please contact me to discuss this further.”

Currently I can only meet the standing charge. I can’t afford the other suggestions either. To put it simply … I can’t afford to use gas but pay £2.50 per week anyway.

I now owe £48.70. It will take at least six weeks to clear the debt alone. I won’t have easy access to heating and hot water until mid-November. Once the debt is cleared I will still only meet the standing charge. I’m not alone. 10 million in the UK people face fuel poverty.

My response to NPower was simple:

“I have an income limited to literally £67.50 per week. This extremely tight budget means I have no more than £10 per fortnight to spend on topping up the gas meter. From this income I have to  pay all household bills, including food, travel, clothing, etc.

1. Can the gas meter be removed without costing me anything for a deposit, etc?

2. Can I have a monthly bill not based on predicted usage but, instead, on how much gas I actually use?

3. Is there any way at all that I can save money?
If the surcharges are £2.50 per week I will NEVER be doing more than paying the surcharges.
I can’t afford a Direct Debit payment of £34.00 per month.

4. Can the surcharges be tackled? If I do not use gas it seems only fair that I do not pay for non-use. I face a cold winter already but with this set-up I face a cold winter and an increasing debt.

5. Is there any help available to people in my situation who are struggling to meet  the surcharges, let alone the bills, and face a bleak winter without heating and hot water?

I read with interest today that the energy companies boast profits of £125 per customer per year. I wonder how NPower justifies this and would be interested to hear the opinion of an executive in this matter.”

I urge you to do the same if your bills are too high. Write to your MP. Write to the complaints department of your energy company. Write to the All-Party Parliamentary Fuel Poverty and Energy Efficiency Group, of which your MP might be a member: you can check here.

The energy companies are raking in enormous profits while our elderly, our young, our middle-income, low earners, our unemployed, our students are sitting in the dark and in the cold. We can’t let this go on.

Adam Scorer from Consumer Focus is right when he says customers believe they are being ripped off by the big six energy companies and more competition needs to be introduced to the market … I certainly believe I am but increased competition is not the answer.

A warm, dry, well-lit home, with access to hot water should not be a luxury and it is not just the poorest in the UK who can’t afford to meet their energy bills. Too many people are spending too a high proportion of their incomes on fuel. Too many have to choose between food and heating, hot water and lighting: forced to sit in the cold.

British workers should not face this never-ending increase in costs of energy and rising bills – meaning shareholders make a profit and we are literally left out in the cold. Energy companies need to start treating their customers fairly.

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5 thoughts on “Energy cartel leaves us cold …

  1. A very good write up. Those on low incomes often end up paying more due to surcharges on pre-pay meters or not paying by direct debit (Ebico being one of the few who don’t penalise but obviously it’s hard to charge supplier if you’re already in debt with your existing supplier.It’s the same as banks slugging overdraft charges.There comes a point where it becomes near impossible to dig yourself out). The less well off tend to live in the least well insulated houses too and grants tend to only be available to home owners (very unfair).
    The two tier pricing structure and standing charges of the big six also penalises low energy users on low incomes. A big shake up of housing, access to insulation and micro generation and the domination of the big six energy suppliers is needed but is there the political will? I wish you well and hope others too will bring pressure on their local MP in the vain hope that they actually care.

  2. Well argued, but you have missed the sleight of hand the energy companies have employed.
    The trick and they told you! but you forgot to listen… they sold the electricity to each other keeping the price high, so no other company could buy it, and then sold it to us. This ends up as profits on generation and transportation. Great for the share holders, Have a look at their balance sheets. They get is a really nice lady to explain the fact that they on make a small profit in relation to the price they paid for the energy. How doy deal with bastards I don’t know – perhaps re-nationalise, or set fire to the whole lot of greedy scheeming sods in addition to that half wit politician in charge ( Mr Hughes?)

  3. Pingback: Sick of Currie … | unemployedhack

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