Energy Prices Boil Over

Since my last article on wind farms there has been news released that British Gas will increase their gas and electricity prices by an enormous 18% and 16%, promptly followed by all of the other companies. This comes just eight months after it raised its prices by a huge 7%.

The increase will affect 9 million customers and be effective from 18th August, adding an average £192 to the annual household fuel bill, and we are powerless to stop them.

Ofgem is the official body that was set up to regulate and control the gas and electricity markets. In their mission statement they say, “Protecting consumers is our first priority. We do this by promoting competition, wherever appropriate, and regulating the monopoly companies which run the gas and electricity networks.” What a joke.

This energy regulator, which presides over the rip-off gas and electricty prices, has awarded its staff colossal pay rises in recent years.

Lord Mogg, Ofgem’s Chairman, received £145,000 for a three-day week during 2008/9, a 38% rise on the previous year. The 65-year-old peer, who chairs the remuneration committee that sets the board’s pay, also claimed £19,000 of travel expenses in two years. He commutes to Ofgem’s Westminster offices from his £1m home in Brighton.

Ofgem say Lord Mogg’s pay rise reflects “increasing responsibilities for the development of EU regulatory policies”. Well they would, wouldn’t they? They certainly can’t claim they are performance linked.

Alistair Buchanan, the chief executive of Ofgem, was paid £260,000 in 2009, a £15,000 rise on the previous year. The former investment banker has been made a CBE for “public service.”

Since it was created, Ofgem has been accused of failing to control the big six energy suppliers, allowing them to push through extortionate and wholly unjustified price increases.

Recently, Ofgem says it is determined to “radically overhaul” the retail energy market and has told the “big six” power companies that their complex tariffs are going to come under scrutiny.

Ofgem’s chief executive, Alistair Buchanan, said: “Energy suppliers have to transform the way they deal with customers. We are also seeing signs that the penny has dropped with the big six and they are ready to take part constructively in the debate.

Could this be because the new coalition government has threatened to disband them, and their ridiculously inflated salaries?

Ofgem was set up in 1999 and has been constantly criticised since then, but to no avail. At best, it is a toothless, energy company’s lapdog, and at worst, it is a self-serving body that has failed the taxpayers who pay for it, in the forlorn hope it might protect them from the avarice of the “big six”.

The sooner it goes and we have some proper energy regulation, the better.

Meanwhile the Spanish chairman of Scottish Power, Ignacio Galan, had his pay package doubled to £10.5 million just before his company raised gas bills for 2.4 million British households by £175 a year.

Well good for him, eh? He needn’t worry about hearing any argument from Ofgem.