Why isn't Ofgem doing more?

27 July 2011

British Gas has been slammed with a £2.5 million fine for poor complaints handling just weeks after Scottish and Southern Energy (SSE) was found guilty of doorstep mis-selling.

Although it’s good Ofgem has fined British Gas - when it comes to energy companies - the regulator should be doing more.

While a fine is a step forward what exactly does this mean for us? British Gas has said its profits will cover the costs of the fine so the customer won’t have to bail it out - but if British Gas has got enough profits to cover £2.5 million then why is it hiking energy bills up so much?

Three of the big six providers have announced rises in the past few weeks and at the same time a fair number of them are being investigated for shoddy practices.

British Gas will put its prices up by 18% from 18 August and gas by 16% pushing the average dual fuel bill up £192 from £1,096 to £1,288. Scottish and Southern Energy and SouthernPower have made similar announcements and the rest of the Big Six are likely to follow.

How the companies can justify these rises when at the same time being accused of bad practice astonishes me. Just this week the Energy and Climate Change Committee accused them of "Del Boy" tactics and said many may be guilty of giving misleading and confusing information through doorstop selling.

Ofgem says its aim is to protect the interests of gas and electricity consumers but surely a good way to do this is by regulating the price these companies can charge?

Although energy providers are pushing up prices in line with increasing worldwide oil prices - if British Gas can afford £2.5 million from its profits it can’t be doing too badly.

In March Ofgem also revealed evidence that energy providers are quicker to pass on price increases than they are to pass on price cuts - but why doesn’t it then force the providers to keep a transparent record of the prices they charge, profits made and how these both relate to rising oil prices?

As consumers we’re forced to use these providers and pay whatever prices we’re told to but it’s even worse when the companies in question are exposed for such poor practices.

Ofgem should have the power to force companies to lower their prices. This would give the regulator much more backbone and would make it a real threat to the companies in question.