'Big Six' accused of overcharging as bosses appear before MPs

The chief executive of a rival energy company has said the big energy firms are taking advantage of those who are unlikely to switch.

by Gabriella Griffith

It’s been an eventful few weeks in the energy industry. We’ve seen rage-inspiring energy price hikes by the ‘Big Six,’ the ensuing public outcry and yesterday the bosses of the UK’s largest energy companies appeared before MPs to defend their decisions – and the mud started to fly.
Young rival company Ovo Energy has accused the big energy companies of overcharging customers who do not switch supplier (pinpointed as those on lower incomes and without internet access) and has claimed they are exaggerating their costs.
‘It looks to me like a lot of energy companies, a significant number of the Big Six, are charging the maximum price they feel they can get away with to the customers that they feel will not switch under any circumstances,’ said Stephen Fitzpatrick, managing director of Ovo Energy.
‘You should not be able to save 16 per cent from switching from one tariff to another. If you are, the customer will ask themselves, how long have you been overpaying for.’
Fitzpatrick has suggested the ‘Big Six’ are exaggerating the increased costs, which they have used as an excuse for the price hikes.
‘I can’t explain any of these price rises, other than they are not the prices we see in the liquid wholesale market,’ he said.
‘I can tell you, of the four companies that have raised their prices, we are around £160 cheaper. So that's about 12% to 13% for a customer of average consumption.’
The allegations came during an MP Committee meeting yesterday, in which energy bosses were asked to justify the price rises.
Tony Cocker, chief executive of E.On, one of the UK’s largest energy companies, has flown to the defence of the bigger companies, suggesting small energy firms have an unfair cost advantage by avoiding certain levies.
‘The small companies are exempt from a number of environmental and social obligations,’ Tony Cocker told the BBC's Today Programme.
‘Not all, but some of them.’
MT doubts that will stop bargain hunting energy customers from taking an interest. Apparently, such levies make up 8% of the average bill. British Gas, SSE, Scottish Power and Npower have raised prices by an average of 9.1% so far this month.

The energy bosses may have filed out of Westminster but his debate is far from over yet…

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