ED HAS SPOKEN…

Ed has spoken out about the failure of the energy companies to pass on cuts in their domestic retails bills to customers after the falls in the price of wholesale gas and the energy companies have trembled. All well and good, it is more than reasonable for the energy regulator Ofgem to be given new powers to force firms to cut gas and electricity bills - to reflect falls in wholesale energy prices.

Since June last year, oil prices have gone down by 50% and wholesale energy prices have dipped by 30%. But the prices being paid by households to heat their homes have not fallen at anything like that speed. 

While EON is the first of the big 6 energy cartel members to cut their domestic energy bills, it is probably fair to say that this was not driven by an Ed inspired pre panic. Energy UK – the energy supplier’s trade body’s pronouncement that they (the energy companies) are already passing on price cuts to customers. Ofgem at present does not have the power to force a reduction in prices. It is worth noting that Wholesale energy costs have been dropping in recent months, with the price of a barrel of Brent Crude oil falling to below $49 dollars this week.

The Labour leader has said that he would demand fast-track legislation on energy in a House of Commons debate next week. When he served as Secretary of State for Energy and Climate Change from 3^rd October 2008 until 11^thMay 2010, he showed no great desire to regulate the unscrupulous activities of the energy cartel on our behalf. We have been here before with mumbled words of condemnation from the former New Labour energy minister calling for the energy cartels to pass on the benefits of wholesale energy price falls to its customers. 

Warm words aside, Westminster is incapable or unwilling to deal with this problem, so perhaps it’s time for a home grown solution to the problem. We need a new Welsh national energy company, an Ynni Cymru to break the stranglehold of the Big Six energy cartel members on the energy market.

We in Wales, need a ‘not for dividend profit’ company, as with Glas Cymru works within our water industry. This would firmly ensure that customers come before shareholders dividends and the City of London and that all the profits would be reinvested back into the energy sector in our country, ensuring that Welsh families, households and small and larger businesses get a good deal on their energy and our country will end up with secure sustainable energy supplies. 

INDIFFERENT, INCAPABLE OR UNWILLING…

That cold nip in the morning is a reminder that winter is coming; as the evenings draw in and days get colder we should prepare ourselves for the annual energy company price hike. I have no doubt that the big energy cartel members, known collectively as the ‘big 6’, will take advantage of the relative lack of regulation to raise their prices to rake in the cash at our expense once again.

Sadly this state of affairs is something that we have all become used to with an effectively unregulated energy market and little action beyond weak weasel words from successive Labour or Conservative / Liberal Democrat Westminster governments. This winter, as previously people will be put into a situation where they have to make a stark choice between heating their homes and putting food on the table.

The Westminster elite is perhaps more focused on employment activities within the energy and banking sectors after they cease to politicians than stepping up to the mark to ensure proper regulation of the energy market and some degree of protection for the rest of us hard-pressed energy customers. Westminster is indifferent, incapable or simply unwilling to deal with this problem.

We need a Welsh national energy company, an Ynni Cymru to break the stranglehold of the Big Six energy cartel members on the energy market. Wales needs a ‘not for dividend profit’ company as with Glas Cymru works within our water industry. 
This would ensure that customers come before shareholders dividends (and the City) and that all the profits would be reinvested back into the energy sector in our country. This would ensure that Welsh families, households and small and larger businesses get a good deal on their energy and our country will end up with secure sustainable energy supplies.

A HARSH CHOICE THIS WINTER: HEAT OR EAT

As the evenings draw in and days get colder the news that SSE have bumped up their domestic energy charges by 8.2% to cash in on the predictable spike in demand for winter heating will not come as no surprise. I have no doubt that the otherfive of the energy cartel members, known collectively as the ‘big 6’, will similarly raise their prices to rake in the cash at

A harsh choice: Heat or Eat?

our expense (British Gas were the first). Sadly this state of affairs is something that we have all become used to with an effectively unregulated energy market and little action beyond weasel words from successive Labour or Conservative Westminster governments. This winter, as never before, people will be put into a situation where they have to make a stark choice between literally heating their homes and putting food on the table. Rather than mumbled words of condemnation from a former New Labour energy minister (Ed Milibrand, as Secretary of State for Energy and Climate Change from 3^rd October 2008 until 11^th May 2010, showed no great desire to regulate the unscrupulous activities of the energy cartel) ) was for the energy cartels failure to pass on the benefits of wholesale energy price falls to its customers and their excessive profiteering, we need action. The Westminster elite (and I lose the term loosely) appears to be more focused on employment activities within the energy and banking sectors after they cease to politicians than stepping up to the mark to ensure proper regulation of the energy market and some degree of protection for the rest of us hard pressed energy customers. Westminster is either incapable or simply unwilling to deal with this problem, so perhaps it’s time for a home grown solution to the problem. We need a new Welsh national energy company, an Ynni Cymru to break the stranglehold of the Big Six energy cartel members on the energy market. Wales needs a ‘not for dividend profit’ company, as with Glas Cymru works within our water industry. This would firmly ensure that customers come before shareholders dividends and the City of London and that all the profits would be reinvested back into the energy sector in our country, ensuring that Welsh families, households and small and larger businesses get a good deal on their energy and our country will end up with secure sustainable energy supplies. 

GAS PRICES, PROFITS OR DIVIDENDS?

Centrica Shareprices

Centrica, which owns British Gas, has warned that customers may face higher energy bills. Centrica says that "end-user prices" do not reflect the price they are paying for gas on the wholesale market. Additionally the company also stated that it was likely to cut investment in the UK after the Government raised taxes on North Sea oil and gas production. Centrica says that the tax hike would erode profit growth in 2011, sending the company's shares down more than 4%. Hmmm gas prices? falling profits or fresh dividends for shareholders? Your new bill coming to a letter box near you...

THE GREAT GAS PRICE RIPOFF

The new report by Customer Focus (the Energy watchdog) makes interesting reading as it flags up an interesting fact, in that the energy suppliers have not been fully passing on declines in wholesale costs to their customers - which means that Customers are being overcharged by an average of £74 on their annual energy bills.

Despite some recent fluctuations in price, Crude oil has fallen from $147 a barrel in July last year to about $70 a barrel. No one is disputing that the six main energy suppliers have not cut their prices since the beginning of the year, but Consumer Focus research suggests that current gas bills should be at least 7.4% cheaper (£60.10 annually) and electricity bills at least 3.1% cheaper (£13.80 annually).

Customer Focus’s new research for the first time shows the reality, that the energy companies are pocketing £1.6bn extra, while millions of households struggle to make ends meet. Consumer Focus says its research, based on applying hedging strategies outlined by the energy regulator Ofgem, shows that energy suppliers are overcharging customers by a combined £1.66bn this year.

The Energy companies who have reaped a 500% increase in profits over the last five years have been quick to blame rising oil and gas prices, and quick to rake in the profits, as the average annual dual fuel bill has risen from £662 a year in 2005 to 1,048 in 2007. The New Labour Government has been more than happy to rake in the extra tax revenues and the Energy companies have been equally slow to pass on reductions in energy costs to their customers – the only real losers in this happy picture are the energy customers.

So what we have here is an effective monopoly on energy supply in the UK; the number of energy supply companies has fallen from twenty two to six in the last ten years, with less that £30 differential between all of the energy supply companies, which works out to be no more than a few pence a week difference in bills, what we have is an energy cartel which brings minimal benefit to hard pressed energy customers but maximum gain to it's members. Hmmmm....