Gavin Maclure's Musings

My take on politics locally, nationally and internationally


1 Comment

Time to bust open the Energy Cartel

Profiteering: Electricity and gas prices are going up

Just as the Arctic blast arrives and we find ourselves reaching for the thermostat, the ominous white envelope  lands on the doormat. I wonder what that could be.

Ah, yes, it’s your “friendly” energy company. With all six energy firms trying to scrape every bit of profit off the bottom of the barrel, they ONLY ever spend money on writing to you when they are telling you your bills are going UP. Anything else: go online or wait three hours for a call centre agent to pick up the phone.

And so it happened this weekend when I received said letter from nPower telling me my electricity was going up by 18% and my gas was going up by 16%. But it’s not their fault you see. nPower even had three stock excuses for ramming my energy bill up by NINE TIMES inflation. The first one is the real killer:

“It’s costing us more in taxes and obligations to carry out government environmental and social schemes”

Pointless: the reason your energy bills are going up

What “government environmental” means is wind farms. The energy companies are being forced by law to invest in “renewable” energy, i.e. wind turbines that don’t turn because of a lack of wind or they turn too fast because it is too windy and therefore have to be switched off unless they break.

So instead of adding more energy to the network, wind farms add next to nothing and instead cost you and I more in additional electricity charges. This is all to meet EU-imposed Co2 emissions targets for non-existent anthropogenic global warming. This may be the wet dream of politicians like Tim Yeo and John Selwyn Gummer who are raking in cash from their various directorships of “green economy” companies but for us mere mortals all it means is a higher energy bill each month so our political elite can keep dining in Brussels. In fact, temperatures haven’t risen since 1997 and the last few winters have been perishing with the Met Office predicting another particular cold one this year.

On top of pointless green policies, which reek of a money-making exercise for the enlightened elite bordering on corruption, it is becoming clearer the big six UK energy firms may be in cahoots with each other. In other words, they may be operating a cartel. No real competition exists. Each firm puts up their charges by the same amount. If you switch, you might get an introductory bonus in the form of “cashback” but you will soon be dragged back into a punishing rate with the only option being to go through another painful switching process if you want to save a few pounds. Not worth the effort and the big six know this.

Of course, if any energy firm talks to another about their prices, they would be committing an offence under the Competition Act 1998. People can go to jail for breaking this law. My question is why are we seeing so little enforcement from the government regulator, Ofgem? Surely there is enough anecdotal evidence of wrongdoing. Ofgem did in fact start an enquiry into profiteering two years ago but since then they have gone very quiet.

Well the tipping point is coming as David Cameron saw when he quipped in the House of Commons energy firms will be compelled to give customers “the lowest tariff”. The PM then quickly backtracked when he realised the government hadn’t actually worked up a policy yet. But in any case, does he really think bills will come down if the big six are forced to offer the lowest tariff. All these profiteering firms will do is dump the majority of their price plans and offer one tariff at the highest charge they can with all six energy firms conveniently offering the same price: a big fat high price!

What we need is real competition. The market needs to be opened up to tens of more firms to dilute the influence the big six have. Currently, no free market exists and it is just another case of capitalism only working for the few, not the many.