Consumers Face Hike In Energy Bills

(Reuters) – CONSUMERS COULD SEE THEIR ENERGY BILLS rise by up to a quarter over the next 10 years as Britain faces a requirement to invest £200 billion to secure supplies and meet climate change targets.

Energy regulator Ofgem said today the investment would be needed to pay for new power plants and other infrastructure.

‘Given the massive levels of investment needed, there is a high likelihood of rising consumer bills, especially if oil and gas prices continue their underlying rise since 2003,’ Ofgem said following a review of Britain’s energy supplies.

The regulator said customers could face increases in domestic energy bills of between 14% and 25% by 2020, while wholesale price spikes could lead to temporary increases in bills of up to 60% in the interim period.

Ofgem said Britain faces a number of challenges to its gas and electricity supplies over the next ten to fifteen years including power stations nearing the ends of their lives and an increasing need to import gas via volatile global markets.

‘These are big challenges. Britain faces a tough challenge in maintaining secure supplies whilst at the same time meeting its climate change targets,’ said Ofgem chief executive Alistair Buchanan.

Shadow Energy Secretary Greg Clark said the country faces a combination of price rises and worries that power supplies are going to be interrupted.

‘It’s yet another piece of evidence that we face a real problem here. It’s really a horror show,’ he said.

Britain’s main gas and electricity suppliers are Centrica, EDF, E.ON, RWE, Iberdrola’s Scottish Power, and Scottish & Southern Energy.

Ofgem said it will put forward proposals in the new year on how the industry can meet the challenges following a consultation period.

Ofgem Forces Clarity On Direct Debits

(Reuters) – OFGEM WILL INTRODUCE new conditions on utilities to ensure direct debit payments are accurately set and explained to customers, the energy regulator said today.

Ofgem produced a study in March which found energy companies were inadequately explaining increased charges to its customers.

‘The proposed licence condition will help give customers peace of mind that the amount they are being asked to pay is based on their likely energy use,’ chief executive Alistair Buchanan said in a statement.

Ofgem said the new measures, expected to be in place by winter 2009, will also make companies explain why they were holding onto credit surpluses built up by customers.

In a separate move, Ofgem confirmed it will ban unjustified price difference for customers using pre-payment metres or off the gas grid from September 1st.

The practice was highlighted in Ofgem’s retail probe last year. Energy suppliers have already removed £300 million of unfair price premiums, the regulator said.

Ofgem was also in the final consultation stage of other measures stemming from the retail probe, that could include tougher rules on doorstep sales and a new annual report on energy use and cost for customers.

Britain’s biggest energy suppliers are British Gas owner Centrica, ScottishPower, RWE npower, EON UK, Scottish and Southern Energy and EDF Energy.