Energy firms warned over rising bills

Energy firms have been slammed for a lack of engagement with businesses and households over record energy bills, ahead of the coldest months of the year.

The Federation of Small Businesses (FSB) called on Business Minister Grant Shapps to intervene to prevent suppliers “finding routes to inflate prices.”

It hammered the “lack of responsiveness” from the country’s titan suppliers, after asking them to freeze standing charges and not disconnect small businesses during the tough winter ahead.

Suppliers were also urged to not ask struggling business customers for unreasonable upfront payments.

Firms were “trying everything in their power to reduce their energy consumption to avoid raising prices or laying off staff,” FSB boss Martin McTague said.

FSB revealed they had written to the chief executives of the six leading energy suppliers in September, including Centrica, EDF, E.ON, Octopus, Ovo, and Scottish Power, urging them to honour the Energy Bill Relief Scheme for businesses.

It said only Scottish Power had offered a holding reply, with the other firms failing to offer responses.

City A.M. approached all Big Six firms for comment.

An EDF spokesperson saidL :We are confident that we’re continuing to provide customers with competitive offers. Wholesale energy costs have increased over the past 18 months due to the war in Ukraine and global gas constraints. The costs businesses are seeing reflect these higher costs and risks.:

Ovo confirmed it has no business customers – the other five suppliers had not commented on the record at the time of publication.

Meanwhile, Octopus revealed they had not been sent any letters.

City A.M, understands FSB instead sent the letter to Octopus Group.

EnergyUK, the trade group for the energy sector, said it was engaging with industry leaders on how to support firms when government support expires next April.

As wholesale gas prices continue to be “extremely volatile,” this means that business’s energy costs, particularly for firms coming to the end of fixed contracts, have “inevitably risen sharply,” the EnergyUK spokesperson added.

Uncertainty over future prices “makes offering new fixed rate contracts very difficult” and suppliers have to “make commercial decisions”, they added.

The Department for Business Energy and Industrial Strategy (BEIS) revealed yesterday that it was working with energy regulator Ofgem to “ensure businesses are able to see the full effects of support offered by the scheme.” 

, as well as encouraging them to commit to freeze standing charges for small business customers, not to ask for unreasonable upfront payments and not to disconnect vulnerable small firms.

Only “a small minority” of businesses had reported suppliers had set prices that “undermine the benefits” of its support, BEIS added. 

Ofgem urged to stand up to energy firms

Alongside concerns over businesses, Citizens Advice has urged Ofgem to ensure suppliers provide accurate information for households facing record energy bills, and offer the necessary support for vulnerable customers.

Gillian Cooper, head of energy policy for Citizens Advice, described this coming winter as “extremely worrying.”

She told City A.M.: “Companies must be able to explain why customers’ bills have gone up. It’s important that they’re at the end of the phone to help if needed – particularly for people who can’t get support online. Ofgem must make sure companies are doing this.”

The charity previously criticised Ofgem for failing to act against “unfit energy suppliers for nearly a decade,” in its review of the energy market.

It argued this contributed to the collapse of 30 suppliers, including the de-facto nationalisation of Bulb Energy, costing up to £10bn to clean up.

When approached for comment, an Ofgem spokesperson said: “Suppliers must do all they can to support customers and to recognise the significant worry and concern increased direct debits can cause.”

Earlier this year, Ofgem conducted a review of suppliers handling direct debits, finding moderate or significant issues with how six of them handled customer accounts. 

Households are facing record energy bills of £2,500 per year for average use this winter, despite vast subsidies included in the Energy Price Guarantee – estimated at over £42bn by Cornwall Insight. 

In response to such high costs, the Government unveiled £1bn support for energy efficiency programmes yesterday and launched an £18m public information campaign.

It aims to provide Brits with more incentives to invest in insulation while offering meaningful advice to ease record energy bills.

This includes advice to lower boiler flow temperatures, turn down radiators in empty rooms and draught proof windows and doors.

Such calls for reducing energy usage come amid continued concerns over blackouts this winter, with National Grid stopping short of rolling out emergency plans for the first time yesterday.

It was poised to offer households money to cut their energy usage tomorrow at peak times to avoid blackouts, but pulled back after a scramble to secure enough power to keep the lights on.

If it had gone ahead, it could have raised the chilling prospect of households turning off their TVs when England play Wales in the World Cup tonight to save energy usage.