Hidden energy price hikes to be outlawed

Energy Secretary Chris Huhne pledged today to outlaw this "outrageous" tactic (see the Cheap Gas & Electricity guide).

Industry regulator Ofgem is preparing to consult over moves to change rules that allow energy firms to notify customers of price changes up to 65 days AFTER they've been imposed.

If energy firms challenge this amendment, the Government will step in.

The intervention, mooted by the previous Labour government, is a victory for MoneySavingExpert.com's campaign to end what are effectively retrospective price rises (see our 50-Word Consumer Manifesto, of which this is one of our concerns).

'Outrageous'

Speaking ahead of his speech to the Liberal Democrat conference, Huhne said: "I want to make sure the energy companies never again raise prices without telling consumers.

"Sometimes they've raised prices and they've gone 65 days in a winter without actually telling householders that they're putting up their gas and electricity bills.

"It is outrageous that energy companies have been able to hike up prices without even bothering to tell their customers. I can't think of another example where you start paying more for something without being told about it.

"The best result for consumers will be if energy companies don't block the changes that Ofgem will propose. But if they do, I won't hesitate to use my powers to end for good the practice of surprise energy bill hikes if that's what consultation shows to be necessary."

Help switching

Huhne also said consumers need more help to know when to switch supplier.

He explained: "We need to provide consumers with more information so if they've got an energy supplier who's charging a little more than it ought to, they will be able to see, on their bill, the other deals that might be on offer."

It is unclear whether the Government will, in reality, force energy firms to list tariffs offered by rival providers.

Under industry rules that came into force in July, energy firms must produce annual statements that include comparisons with other deals offered by that supplier only.

Households can sometimes cut their bills by hundreds of pounds a year by checking the tariffs available via a specialist comparison site and switching, if necessary, to a cheaper alternative (see the Compare Gas & Electricity And Get Cashback guide).

Those languishing on their supplier's standard tariff or who get bills through the post are almost certainly paying too much.

While the cheapest online deals for typical users are less than £900 a year, those on a standard tariff typically pay around £1,200.

Additional reporting by the Press Association.

Further reading/Key links

Slash energy costs: Cheap Gas & Electricity Your rights: Fight Energy Direct Debits Capped tariff help: Is Your Cap/Fix Ending Soon? Boiler protection: Boiler Cover