Government price caps have not prevented ‘big six’ energy suppliers, Npower, EDF or E.On from increasing prices again, according to a report in the Telegraph.
The increase comes after regulator Ofgem announced it was raising the ceiling on bills by £118, little over a month after the price cap came into effect.
According to journalist Sam Meadows: “The increase outstripped industry predictions despite being in line with the rise in the wholesale cost of providing energy … Yet the actual cost of generating the energy makes up just 35% of your bill.”
Only £74 of the £117 rise is due to higher wholesale energy costs – the remainder is due to transportation, environmental and policy costs.
It has been reported that despite coming into force in January, the price cap is likely to be reassessed again in August.
Extra Energy, one of the energy retailers which ceased trading late last year blamed the impending price cap for their collapse, saying that the UK energy market was no longer viable.
But what about customer service?
Customers of the failed retailers have been taken on by Utilita and Ovo, in line with Ofgem’s safety net procedures.
However, it is now believed that Utilita and Ovo are under investigation by Ofgem for customer service issues.
“An inability to deal with customer complaints in a satisfactory manner is a key concern when smaller energy companies expand,” according to Choose.co.uk
British Gas too has been in the limelight, and has had to pay £2.65m in refunds and compensation after an investigation in 2018 which found that the utility had wrongly levied “exit fees on customers leaving fixed price deals, as well as overcharging customers who tried to switch away.”
The payments made “included £502,633 in compensation to overcharged customers and £244,770 in compensation to those wrongly charged exit fees.”
The remaining £1,050,229 was paid into Ofgem’s Consumer Redress Fund.