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Energy companies 6 Us 0

Nothing is so hard for those who abound in riches to conceive how others can be in want.

Sometimes it’s nice to be able to say ‘I told you so’. Often though, it’s more of a pyrrhic victory.

And lo, what the industry warned has come to pass. That cutting the ‘green levy’ on household energy bills would benefit the energy companies rather more than the householders.

Ministers have now “discovered” that the windfall to the energy companies has turned out to be larger than anticipated. Funny that.

Householders might now be eligible for an extra £23 reduction on their bills, in addition to the £50 cut agreed in December.

Back then, the Big Six energy suppliers agreed to cut prices to their consumer customers by £50 in return for ca change of policy which would cut the overhead costs of those companies. Or, to put it another way, by welshing on their commitment to reduce household energy consumption, the Government sold the insulation industry down the proverbial river.

The £50 cut was funded by cuts to the ECO scheme (Energy Company Obligation) which required suppliers to insulate homes, partially using funding from household bills. The scheme was watered down and run over four years instead of two, requiring suppliers to insulate half the previous number of homes per year.

The Government has now put new batteries in its calculator and worked out that “companies are likely now to be in a position to make greater savings than they had originally projected in December”.

Maybe the Big Six energy companies just did some dodgy maths and underestimated the amount of savings they would make and no one bothered to check until now. The more cynical amongst you might think that this was deliberate. I couldn’t possibly comment.

Anyway, has the Government come down on the energy companies like a tonne of bricks (assuming that it could get its hands on such a rarity), demanding that recompense is made to householders? Has it chuff.

All it has said is that the energy companies should “ensure that consumers benefit from this further reduction in delivery costs in a concrete way” and that it is inviting them to “set out publicly how they propose to do this”.

Mind you, it possibly won’t be the energy companies’ fault if this doesn’t happen, since this little nugget was buried on page 50 of a Government consultation response document.

And I won’t be waiting with baited breath for my extra £23. I’ve looked pretty damn hard at my energy bills and I’m blowed if I can find that £50 reduction.

About Fiona Russell-Horne

Fiona Russell-Horne
Group Managing Editor across the BMJ portfolio.

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