Electricity prices are too high, says European Commission

Published 03rd Feb 2009

THE European Commission is to launch an investigation into the price of electricity, following concerns that they may be too high.

Commissioner for Consumer Affairs, Meglena Kuneva said the decision followed an initial report which showed prices charged by some suppliers across the 27 member states may be excessive.

"Less than two thirds of consumers are satisfied with their energy supplier," said the commissioner.

Across the EU, about 60 per cent of consumers reported a rise in their electricity bills last year, while only 3-4 per cent saw falls.

It follows an announcement by British Gas last month that it would cut its standard gas bills by 10 per cent, but would not pass on cuts to electricity customers.

The new rates, which will save the average customer around £80 a year, will come into effect on February 19, benefiting 7.5 million of the supplier's 15.6 million customers.

Yet they will see no reduction in electricity bills, despite a 35 per cent drop in wholesale costs since last summer. It means dual-fuel customers will see their bills drop by a mere 7 per cent.

Critics also point out the gas cut was only half what they expected given the 50 per cent fall in wholesale gas prices since they peaked last summer.

Mark Todd at comparison website energyhelpline.com said: "Given the dramatic falls in wholesale energy prices, we were hoping for something more like 20 per cent."

British Gas said it had not passed on the full effects of last year's wholesale price increases , so consumers could not now benefit from the full drop.

The UK government has already urged suppliers to pass on savings to customers and warned that it may legislate to lower bills.

The energy regulator Ofgem told suppliers in October that they had to stop charging customers different rates if they paid by direct debit or pre-payment meters.

The EU investigation will be carried out over the next 12 months in conjunction with Energy Commissioner Andris Piebalgs.

Source: ' Times '

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