• 4 minutes US-backed coup in Venezuela not so smooth
  • 7 minutes Why Trump will win the wall fight
  • 11 minutes Oil imports by countries
  • 13 minutes Maduro Asks OPEC For Help Against U.S. Sanctions
  • 3 hours Climate Change: A Summer of Storms and Smog Is Coming
  • 2 hours Itt looks like natural gas may be at its lowest price ever.
  • 4 hours Venezuela: Nicolas Maduro closes border with Brazil
  • 7 hours Teens For Climate: Swedish Student Leader Wins EU Pledge To Spend Billions On Climate
  • 3 hours Tension On The Edge: Pakistan Urges U.N. To Intervene Over Kashmir Tension With India
  • 2 hours Saudi A to Splash $100 Bln on India
  • 5 hours Amazon’s Exit Could Scare Off Tech Companies From New York
  • 1 day North Korea's Kim To Travel To Vietnam By Train, Summit At Government Guesthouse
  • 19 hours students walk out of school in protest of climate change
  • 2 days Europe Adds Saudi Arabia to Dirty-Money Blacklist
  • 1 day Some Good News on Climate Change Maybe
  • 18 hours Mineral rights owners,
Alt Text

Amazon To Invest In Electric Pickups, SUVs

Amazon was inspired by electric…

Alt Text

The 30 Most Exciting Wildcat Plays Of 2019

As E&Ps are stepping up…

City A.M

City A.M

CityAM.com is the online presence of City A.M., London's first free daily business newspaper. Both platforms cover financial and business news as well as sport and…

More Info

Trending Discussions

Big Six Energy Firms Criticize UK Price Cap Plans

Bosses at the Big Six energy firms today hit back at government plans for caps on energy tariffs, telling MPs the market had become increasingly competitive in recent years and would be hindered by a price cap.

Prime Minister Theresa May pledged in October to end "rip-off energy prices", proposing a price cap on standard variable tariffs (SVTs) and other default tariffs.

Today, energy bosses were grilled by members of the Business, Energy and Industrial Strategy Committee over the draft tariff cap bill and the reasons behind its proposal.

"We want a healthy competitive market that customers trust and we believe that competition is the best way of serving that, rather than price regulation through a cap," SSE's chief commercial officer Stephen Forbes told MPs.

He said a cap would result in worse outcomes for customers, pointing to an investigation by the Competition and Markets Authority (CMA) two and a half years ago.

"In fact, competition's increased since then. We've now got over 60 suppliers competing in the market, we've got 5m customers who have switched energy supplier this year to date. That's a 14 per cent increase," Forbes said.

Forbes added: "I think differentials do place an important role in the sector. The basic tenet of competition is that customers need an incentive to switch and to move supplier."

Peter Kyle, Labour MP for Hove, cited the example of business secretary Greg Clark, who had previously told the Committee he was too busy to switch supplier. Kyle asked whether it was fair some customers were punished for this, while others were paying less for the same product.

E.ON's chief executive Michael Lewis said:

“I think it's right that somebody who engages with the market and searches for the product that's right for them gets a better deal than the person who doesn't, and that's what market is all about; getting that engagement.”

Lewis also said that once vulnerable customers had been taken out of the market and protected, the question was one of engagement "not one of price", and that improvements were being made by firms on this front.

However, SSE still said 72 percent of its customers were on SVTs, E.ON said 61 percent were on SVTs, while 65 percent of Centrica customers were on SVTs, and each said a chunk of those customers had been on the tariffs for more than three years.

While challenger supplier First Utility said it communicated with customers 13 times a year with what better tariff offers were out there, the members of the Big Six said they contacted customers four times as a base, and six times in the case of Centrica.

Related: U.S. Asks China To Implement New Oil Sanctions On North Korea

BEIS Committee chair Rachel Reeves said nobody was stopping the firms following in the footsteps of First Utility.

Speaking to Centrica's managing director UK Home Sarwjit Sambhi, Reeves suggested that the company was happy to have a large wave of customers on SVTs "because that's where you make your profits".

Sambhi said: "I don't think customers would appreciate being contacted on separate occasions 13 times."

He then said that First Utility had monthly billing for all of its customers which enabled the firm to contact customers as often as it did.

Sambhi added: "If we could have monthly billing for all of our customers then we would be contacting them every month, and that is why we want to accelerate and push hard on the implementation of the smart meter programme, because then we can."

By City AM

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News