Summary
This Report from the Business and Enterprise Committee, 'Energy Prices, Fuel Poverty and Ofgem' (HC 293-I), inquires into the effect of the 'Big 6' energy companies - which include Npower, Centrica, EDF Energy, Scottish Power, and Scottish and Southern Energy - all raising their prices between January and April 2008.
The Report aims to feed into a separate inquiry being carried out by Ofgem.
The ideal objective is to maintain a policy of low energy prices for both domestic and commercial users but the Committee believes that the UK's energy markets are not functioning as efficiently as they should and that UK prices may be higher than other countries.
The Committee also states that Ofgem's inquiry will not examine the competitiveness of the wholesale gas market. The price of gas determines the wholesale price of electricity, with gas-fired power accounting for around a third of the UK's generating capacity. High fuel prices will inevitably lead to fuel poverty and the Committee also believes that a root and branch review of government policy in this area is needed.
The Committee sets out 43 conclusions and recommendations in total, covering areas such as:
- Ofgem's inquiry
- The UK gas market
- Increasing gas dependency
- Wholesale gas market concentration
- Oil-gas price link
- Gas contracting
- The wholesale gas market and Ofgem
- Wholesale electricity
- Rising environmental costs
- Wholesale electricity market concentration
- New generating capacity
- Vertical integration
- Wholesale electricity market liquidity
- Changes in supplier costs
- Smart metering
- Social tariffs
- Improving housing.
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