The summer holiday season is well underway and thoughts of central heating and the winter should be furthest from most minds. However over the past few days UK consumers ' attention has been turned to energy bills as the fourth of the 'Big Six' largest energy companies in the UK have announced their intention to increase their energy prices. The move by German-owned utility group E.ON on Friday to increase its electricity prices by 11.4% and gas prices by 18.1 per cent by 13th September, follows in the footsteps of British Gas, Scottish Power and Scottish and Southern Energy. Only two of the Big Six have yet to change their prices - EDF Energy and nPower.
A common denominator in the reason behind these increases is wholesale prices and the impact of recent, uncontrollable world events (such as Japan and Libya) over a short space of time. But, with the Big Six energy companies dominating 99% of the energy marketplace in the UK, and the tough financial situation all round, UK consumers will now face a winter of worry about their energy bills, concerned over whether or not they can afford to keep their homes warm during the coldest months - a fairly bleak prospect.
This concern is not lost on consumer groups and MPs who are lobbying various bodies such as Ofgem, the energy regulator, to refer the energy market for investigation to the Competition Commission amid concerns about a lack of fairness and transparency when it comes to energy bills. Labour is also planning to launch a campaign this summer which aims to break up the hold that the Big Six have on the energy market and make it a more competitive marketplace.
We know that Government is taking this seriously. First Utility is the largest of the leading independent energy suppliers and we were recently invited to a forum with other independent energy suppliers by Chris Huhne, the Secretary of State for Energy and Climate Change to discuss the shaking up of the industry.
A review of the energy marketplace is a step in the right direction. However, unfortunately, wholesale prices and network costs are continuing on an upward trend, and so over the long-term, consumers need to take control of how much energy they are using and as a result adapt their behaviour. At First Utility we know from our own experience that what customers want is to be able to keep an eye on their energy bills and to reduce spend in the long term. But, realistically, how can you reduce something that you can't measure?
We think smart meters have a crucial role to play in this respect. And we know that by 2019 all UK households will be equipped with these meters to give homeowners the information they need. So whilst prices will always fluctuate, the key is to give consumers a fair choice when it comes to suppliers and the ability to manage their own energy consumption and empower them to make changes and reduce spend when prices are high.