LONDON (Reuters) – Britain’s government should act urgently to make sure a value cap on home vitality costs is in place by subsequent winter to assist repair the nation’s damaged vitality market, a parliamentary committee stated on Tuesday.
Prime Minister Theresa May stated in October she would impose controls to sort out what she referred to as “rip-off energy prices” – home energy payments have doubled in Britain over the previous decade to a median of about 1,150 kilos a yr.
The government should cross a regulation earlier than Britain’s vitality regulator Ofgem can set a cap, and Ofgem stated final month this should be handed by the summer season if the cap is to be in place to maintain payments decrease subsequent winter.
“The energy market is broken … an energy price cap is now necessary and the government must act urgently to ensure it is in place to protect customers next winter,” stated Rachel Reeves, Chair of the Business, Energy and Industrial Strategy Committee, which authored the report.
The Committee stated the cap ought to be an absolute value restrict fairly than a relative cap which might restrict the distinction between the very best and lowest costs charged by every provider.
It additionally criticised the massive six vitality firms for overcharging prospects, who will pay as a lot as 300 kilos a yr greater than these on cheaper tariffs, and Ofgem for being gradual and reluctant to behave.
“The Committee urges Ofgem to be faster and more proactive in using its extensive powers to protect consumers from overcharging in the future,” it stated.
Britain’s large six vitality suppliers, which management round 80 % of the market, are Centrica’s (CNA.L) British Gas, SSE (SSE.L), E.ON (EONGn.DE), EDF Energy (EDF.PA), Innogy’s (IGY.DE) Npower and Iberdrola’s (IBE.MC) Scottish Power.
The report additionally referred to as on the government to shut any loopholes within the draft laws, printed in October, which might enable firms to keep away from the cap on dearer inexperienced tariffs, which assure a specific amount of electrical energy comes from renewables reminiscent of wind or solar energy.
Reporting By Susanna Twidale, enhancing by David Evans