Energy companies to be forced into annual review
Energy secretary, Ed Davey, has prepared plans for an annual review into energy companies, in order to investigate and regulate competition within the sector.
The review will be called for in order to ensure that energy companies are raising prices in a fair and transparent manner, and will involve access to the companies’ books in order to certify this.
The profits the companies make, as well as the prices they buy and sell energy at, and the way that they treat customers, will all be scrutinized in order to make sure that they are operating competitively and are not using ‘pack behaviour’ to kill competition within the sector.
The cost of gas has risen by 190pc since 2003, despite that fact that the average family is using no more than they were a decade ago, while the cost of electricity has risen by 120pc over the same period. However, inflation has added just 30pc to the consumer price index over that period, meaning that the price of electricity has risen at four times the rate of inflation, and the price of gas over six times the rate of inflation.
This has meant, according to the Office for National Statistics (ONS), that families now spend 27.3pc of income on essentials, including energy, compared to 19.9pc on 2003, while the proportion accounted for by gas and electricity has risen from 1.8pc to 3.1pc.
A statement from the ONS read: “Household budgets have been squeezed by recent increases in the price of household goods. As a result the recent increases in the price of household energy have taken a larger share of disposable incomes”.
Plans for the review into the energy sector are set to be announced on Thursday.
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