Energy firms ‘charging £25 extra a year’

energy bills

energy billsFamilies in Britain are paying an extra £25 for electricity each year due to energy company overcharging.

The Government believes that companies have been "profiting unfairly at the expense of [the] consumer" by overloading the national grid with electricity.

They are then able to claim "unduly high" compensation payments to switch off their wind farms and power plants when the system becomes too full.

By manipulating the market, ministers claim energy companies have overcharged households and businesses by up to £600 million.

Record bills

The scale of the alleged abuses comes after energy companies announced large profits, at a time when households are struggling to pay record-high bills.

According to official estimates, a selection of companies have been over-claiming for up to five years at a cost of up to £125million per year - the equivalent of £25 for every household in Britain.

And it doesn't matter who your energy supplier is, all bill-payers in Britain have to bear these extra costs.

John Robertson, an MP on the energy committee, admitted this is a lot of money which families shouldn't have to pay.

He is due to write to the Department for Energy and Climate Change (DECC) demanding a full inquiry.

With budgets already stretched to their limits, the last thing you want to be doing is paying too much on your energy bills. You can save hundreds of pounds each year simply by switching provider.

Don't fancy a change? Then there are also some simple steps you can follow to cut electricity usage in your home.

New rules

Ofgem has warned that payments from compensation claims made by the owners of wind farms and gas and coal plants are rising out of control, prompting Charles Hendry, the energy minister, to lead calls to ban such "exploitative behaviour".

Scottish Power and SSE, two of Britain's biggest energy companies,have been investigated for alleged abuses by the regulator. They currently supply energy to six million homes in the UK.

New rules, due to go to consultation this autumn, would force firms to surrender 10 per cent of turnover if they charge excessive compensation in future.

A spokesman for SSE said: "We have been working with the DECC throughout the consultation period and are confident that we have always been and will continue to operate within the given industry framework."

British Gas, E. ON, EDF and npower did not return requests for comment.