Tag Archives: scams

The great energy rip-off

The big energy companies are notoriously quick to put up petrol prices when wholesale oil prices rise but equally slow to put them down when oil prices fall, thus making large unwarranted profits at consumers’ expense by keeping prices sticky at the high end.   Now another market scam in energy supply has been unearthed by Which? in this month’s current issue.

CERT, the Government’s Carbon Emissions Reduction Target, requires the Big 6 – British Gas, EDF, Eon, Npower, Scottish & Southern, and Scottish Power – to help customers install energy-saving measures.   So far, so altruistic.   But that’s not how it ends up.

First, the most effective way of saving energy is solid wall insulation for Britain’s 6.6 million old and poorly- insulated solid-wall properties which could save a typical household’s gas bill by £420 a year.   But the companies don’t do this because under CERT rules customers have to stump up 80% of the cost  which can be around £7,250 for a typical home.   Instead they mail-out unsolicited light bulbs – a staggering 182 million of them – which save each household just £14 each year.   This invalidates the whole purpose of the exercise.

Second, and worse still, customers don’t realise – and are certainly not told – that they themselves are paying for these ‘benefits’.   The regulator Ofgem has recently estimated that the average household pays no less than £84 a year in ‘environmental levies’ on its energy bills, of which £45 goes directly towards funding CERT.   In other words, customers are being forced to fund carbon reduction out of their own (squeezed) budgets, and because the Government keeps no check on how this £45 is spent, it has minimalist impact in cutting carbon, but leaves the companies with large unearned profits.

Not bad for two scams – and more to come.