Regulator warns energy firms over winter bills

07/08/2009

Ofgem, Britain's energy watchdog, has told suppliers not to hike prices too much as winter approaches.

In a letter to the "big six" gas and electricity providers, the regulator's chief executive said that the current market was "competitive" enough to make cuts in bills likely.

Firms raised prices throughout 2008, reflecting increasing costs on the wholesale markets on which they buy their energy to supply.

However, these market prices have fallen back more recently - a trend which gives the suppliers a degree of leeway in which to cut costs.

Alistair Buchanan, Ofgem chief executive, stated: "Wholesale costs have fallen from last year's peak and look set to fall further as we head into the winter.

"In a strong competitive market, we would expect prices to respond to such falls."

The letter added that the current "difficult economic circumstances" might also limit the ability of some to pay their bills if they are set too high.

Commenting on the message, EuroDebt director Kevin Still said: "EuroDebt is pleased to see that Ofgem will be watching the behaviour of the utilities providers over this winter. We introduced our free comparison site at www.energyswitching.co.uk to allow all UK residents to determine whether the provider and tariff they are on is the best for them and this could be valuable this winter, with family budgets continuing to be under pressure.

"We are committed to providing services to individuals and families that may be subject to financial exclusion and being on a Debt Management Plan or an IVA should not stop people from taking advantage of the best energy tariffs."

Tags; Housing Debt and Bills, Young Family Finances, Retirement Money Problems,

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