Ofgem are told to get a grip and address energy price increases.

Ofgem are told to get a grip and address energy price increases.

As we prepare for a possible long and cold winter by stocking up on extra blankets, hot water bottles and sleeping bags – the was suggestion yesterday was that the energy regulator Ofgem (Office of Gas and Electricity Markets), should be slammed for appearing to allow energy companies rip off their customers.

The big six energy companies:- British Gas, EDF, npower, Scottish Power, Scottish & Southern and E.ON have all raised their prices this autumn, which is effectively resulting in each UK household having to pay about £300 more for fuel this year.

Of late the cost for raw gas and electricity has fallen, yet some energy firms have increased their bills by almost 20%, such actions is prompting suspicion that they are all colluding together to keep prices high which in turn is continually forcing UK businesses to reduce their utility energy costs, and UK households to look for Squashed Utility Bills.

Criticism has been tabled towards Ofgem by Labour MP John Robertson, of the Commons Energy and Climate Change select committee – in them failing to use their power and authority in being able to fine energy companies. Energy Secretary Chris Huhne has also admitted signs of “anti-competitive behaviour” and ordered that Ofgem “get a grip on it”.

Mr Robertson expanded in saying: “Ofgem has the power to impose a maximum financial penalty of 10% of turnover on any energy company it believes is acting anti-competitively.

“So why has it not imposed this 10% penalty? In a rough estimate, if it imposed this penalty on only British Gas, whose revenue was £22billion last year, it could have raised £2billlion, which could have been passed on to customers this winter.”

The stark reality is that if all the big six energy companies were fined at the same rate, an estimated £9billion would be clawed back.

Mr Robertson went on to say: “We have a regulator that refuses to bare its teeth to punish companies that are treating customers like serfs.”

“These companies are pinching money out the pockets of the poorest people at a time when snow is about to fall.”

National Grid earlier this year received a fine of £8million from Ofgem as did British Gas for £2.5million for breaching regulations.

In breaking the law on gas meter contracts, National Grid in 2008 suffered the highest penalty ever imposed by Ofgem (Office of Gas and Electricity Markets) totalling £15million.