Energy climate committee criticises UK energy suppliers and Ofgem
A leading group of MPs has slammed the UK's energy industry and its regulator.
The energy and climate change select committee pointed out huge energy price increase combined with massive profits and various mis-selling scandals at some energy firms had totally destroyed the consumers faith in the industry.
It also criticised energy regulator Ofgem for not taking sufficient action to ensure energy company profits were transparent and urged it to do more to tackle the so-called 'Big Six' and other energy firms.
The energy and climate change select committee chair, Sir Robert Smith, said: "At a time when many people are struggling with the rising costs of energy, consumers need reassurance that the profits being made by the 'Big Six' are not excessive.
"Unfortunately, the complex vertically integrated structure of these companies means that working out exactly how their profits are made requires forensic accountants."
Ofgem also came under fire from the committee for not carrying out all of the previously recommended changes for improving how energy firms report their profits.
The group of MPs have now put forward a number of proposed changes to the energy regulator. These proposed changes include Ofgem ensuring energy suppliers state the wholesale cost of fuel and informing customers of the profit taken by the supplier.
MP John Robertson, a member of the committee, added: "Ofgem needs to use its teeth a bit more and force the energy companies to do everything they can to prove that they are squeaky clean when it comes to making and reporting their profits."
Ofgem senior partner for markets, Rachel Fletcher, defended the energy regulators actions though.
She said: "We agree with the committee that suppliers have been poor at communicating with their customers.
"That is why Ofgem has taken the lead in pursuing transparency across all sections of the energy market, [making] energy companies produce yearly financial statements, which have been reviewed twice by independent accountants and found to be fit for purpose."
The 'Big Six' energy firms, as well as many other energy suppliers across the UK, are currently participating in the government's Green Deal initiative. Under the scheme, energy consumers can contact their energy supplier about loans or cashback incentives on items such as new boilers or wall insulation.
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