Energy price fixing

Interesting article in the context of the hidden and extensive fuel poverty affecting communities and individuals in rural England. It tells us:

Ofgem’s proposals to shake up the energy market put “too much onus” on the customer and “do not go far enough”, says one energy company boss.

The energy regulator said four million pre-pay customers would be protected by an interim price cap from next April.

It added it would work with suppliers to help “disengaged” customers to search for cheaper deals.

But First Utility’s managing director, Ed Kamm, told the BBC the plans were in danger of helping the wrong people.

“Ofgem itself admits that consumers who are already engaged in the market will see the first benefits,” he said.

“We are in real danger of continuing to fuel a ‘tale of two markets’ – helping those who already shop around and doing little to properly help those who are continuing to pay much more than they need to or should,” he added.

In its report published on Wednesday, Ofgem said the cap on pre-payment bills would save “vulnerable” households money. At the moment, these customers pay an average of £220 a year more than those on the cheapest deals

I worry about the impact of privatising public services which become cartels or monopolies. In addition to a number of fields (and I wonder whether Royal Mail will add to the list) there seems to be strong evidence emerging that the energy prices which gnaw away at the viability of many rural settlements are subject to price fixing.

Nothing is proved yet but this article tells us: “The energy secretary, Ed Davey, has warned that energy firms could face swingeing fines and be forced to pay customers back through lower energy prices as the gas-trading scandal escalated with more whistleblowers coming forward and claims that the electricity market could have been rigged too. Davey pledged the government would “support the regulators taking whatever steps necessary to ensure the full force of the law is applied” if it is found that prices have been deliberately distorted.

The row could spread to Europe on Wednesday as the whistleblower and gas price reporter at the centre of the row, Seth Freedman, meets senior EU officials to explain his concerns. The Guardian revealed on Monday that Freedman had taken a dossier of data and documents allegedly showing price manipulation in the wholesale gas market to the Financial Services Authority. Both the FSA and the energy regulator, Ofgem, which was separately approached by Freedman’s employer ICIS Heren, at his request, have now launched investigations.

On Tuesday more industry insiders came forward to express their concerns. Tim Fettis, who had acted as an electricity market price setter at ICIS Heren, said he had left the company after a couple of months because he felt uncomfortable about taking on such a responsible job with little training.”