UK – Energy prices must be capped by government

power-system-smallIn the latest round of proposed government energy reforms, energy companies have been presenting their case to the Energy Bill Committee in Parliament.

Government proposals would require energy companies to offer customers their cheapest tariff, however energy companies are claiming that this would be difficult to implement because of their contracts with customers.

Other experts have warned that the proposed legislation will lead to energy suppliers adjusting or scrapping tariffs, and would result in higher overall cost to the customer.

Proposals to regulate that energy companies should automatically offer their lowest tariff to customers are half-baked, if not downright stupid.

Energy companies have proven beyond any doubt that they cannot be trusted with any form of self-regulation or control, and will manipulate the market to maximise their profits. In a recent fiasco, energy companies claimed a price rise was to partly finance the energy infrastructure – that ‘cost’ has always been included in energy bills, so to make that claim now is a downright attempt to rip-off the public.

The energy companies have had it too good for too long. The government proposals are weak and ineffective, and merely an attempt to appease the public. There is only one way to stop this abuse spiralling out of control, and that is to cap domestic energy charges.

Forget fair trade and competition, because the energy companies certainly have, and they need to be taught a lesson for their greed.

We would propose that the maximum tariff applies to all domestic users in all areas of the UK, including prepayment users.

Gas: 

Maximum Standing Charge per month £15.50 (or equivalent, Inc. VAT),
Maximum Unit Rate (kWh) .03p (Inc. VAT)

Electricity:

Maximum Standing Charge per month £10.50 (or equivalent, Inc. VAT),
Maximum Unit Rate (kWh) .11p (Inc. VAT)

These rates would then be linked to inflation.

Further conditions would also be applied to suppliers, including current maintenance obligations, and conditions that the companies will not embark on cost-cutting programmes through making staff redundant, or which would reduce their obligations to supply power. The companies would also not be permitted to introduce any additional charges to customers.

Only when we apply very strict conditions to energy companies will they learn not to ‘cook the goose that lays the golden egg’, and may start taking notice of their customers.

We see no reason to wait until 2014 either. The control could be implemented quickly, and could be reviewed every two or three years.

If the energy companies don’t like the arrangement, then the government should re-nationalise the power industry and operate it as a non-profit organisation.

Will that ever happen? Probably not, because the government is so tightly connected to energy suppliers that they are afraid of either upsetting them or reducing tax income.

 

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