It seems no matter what the government does or doesn’t do, the cost of energy for the UK is going up. Almost all of the major suppliers including British Gas, Npower, EDF and others have announced price increases of up to 11% just in the last few weeks.
Previously, as prices and consumer concern have escalated, government officials have suggested that shopping around for the best rate is a viable way for individuals to save money on utility bills. However, this approach hasn’t worked too well, since power companies tend to put consumers on their more expensive plans even if theoretically the consumer could benefit from a cheaper plan.
At Prime Minister’s Questions, Mr. Cameron said laws would be imposed that will force energy suppliers to offer the lowest possible rates to their customers. According to current reports, at least 75% of customers are on their supplier’s most expensive plan, and well over half had not changed companies in the last 15 years. Quite often the hassle of switching companies negates any savings that may be obtained.
Additional difficulties arise with the new approach, since there are variables in energy charges based on the customer’s location, whether they pay by direct debit, how long their current plan is agreed to last and other factors that affect the rates charged by suppliers. Power company officials insist that the rising cost to consumers is directly tied to their own costs, which include investment in alternate, renewable energy sources.
Forcing energy suppliers to explain and offer the cheapest possible rates to customers seems an iffy proposition at best, since those suppliers insist that when their supply and distribution costs go up, they have to pass it along to customers. Shareholders do not like to see profits decreasing, and many feel that this may be a key factor in the ongoing rise in overall costs to consumers.