Green consumers say suppliers inflate prices

Steve Hawkes and Angela Jameson

More than 85 per cent of Britain's green consumers believe that energy suppliers have been profiteering this year by implementing record price increases on gas and electricity.
An exclusive survey for The Times shows that the reputations of companies such as npower, British Gas and E.ON are close to record lows after a year in which average annual dual-fuel bills have soared to £1,300.
Despite the energy industry's argument that suppliers have no choice but to raise residential prices, more than four out of five of those surveyed believe that the companies have been using volatile wholesale markets as an excuse to boost margins. Only 6 per cent believe that the companies have no choice but to pass on higher costs.
The Concerned Consumer survey, carried out by Populus, also reveals the pressure felt by homeowners as they struggle to balance rising energy prices with spiralling food price inflation and higher mortgage costs. Nearly 80 per cent have turned down the central heating to save money in the past year, almost 85 per cent have fitted low-energy light bulbs and 94 per cent have turned out unnecessary lights in the home to cut electricity bills.

About four out of ten consumers claim that they will switch energy supplier this year to cut costs, with a third looking to sign long-term fixed-price deals.
The findings come only a week after E.ON and Scottish and Southern Energy increased their gas and electricity prices for the second time this year. British Gas raised gas prices by a record 35 per cent in July, a day before Centrica, its parent company, reported half-year profits of £992 million.
Average dual-fuel bills in Britain are £1,300, 43 per cent higher than in January and almost three times higher than at the beginning of 2003 - £543.
Adam Scorer, campaigns director of energywatch, the consumer group, said that the survey's results high- lighted the level of frustration at the lack of competition in the energy market. He said: “The energy companies are able to protect and improve their profit margins with seeming impunity. There's no real competitive pressure on them. There's no company looking over their shoulder and that shouldn't be possible in a competitive market.
“It's easy to see how consumers feel they are profiteering. They hear that conditions are the worst they have been on wholesale markets, that not all the cost is being passed on, but then they see the level of profits they're making. There is a fundamental breakdown in the market.”
A British Gas spokesman reiterated that the company had no choice but to increase bills to cover costs and pay for the huge investment needed to secure future gas supplies.
The Concerned Consumer survey indicates that the price pressure has forced an increasing number of ethical consumers to put their environmental concerns to one side. The overwhelming majority asserts that price is the determining factor when choosing an energy supplier. Customer service is the second-biggest factor, above a company's level of investment in renewable energy.
David Lourie, of Good Business, the environmental consultancy, said: “Price is king, which reflects the current economic climate and the price rises that are being experienced by most customers. Concerned customers are taking steps to reduce their home energy bills, such as turning out lights or turning down thermostats. But probably the most worrying for energy companies is the desire of many customers to switch supplier over the next year due to price.”
Only 350,000 customers in Britain are on green energy tariffs. Good Energy, the supplier that sources electricity from wind farms and solar panels, is rated the best company in the sector in the survey.
Consultation closes today on proposals from Ofgem, the energy regulator, to set up an independent accreditation scheme for green tariffs. The move is designed to make it easier for customers to understand the environmental benefits of the green tariffs on the market.
Fuelling a debate
— Nearly a fifth of Britain’s ethical consumers firmly oppose any role for nuclear power. The Concerned Consumer survey found that 18 per cent of respondents do not want new nuclear power stations
— Nearly two thirds would accept it as a partial solution
— 18 per cent believe it is the best way to tackle climate change
— Experts believe up to eight new nuclear power stations are needed to replace decommissioned nuclear and coal-fired power plants