The recent spate of announcements of price rises from all but one of the big six energy companies came as welcome news to few.
Wholesale energy costs and the need to reinvest in renewable technology were amongst the well-worn lines trotted out by the company’s respective spokesmen, as well as their balance sheets.
But now, energy watchdog Ofgem is to step up its investigation into whether the energy companies have been being ‘creative’ with their accounting and understating their retail profits in order to justify higher prices to consumers. It has drafted in the services of forensic accountancy outfit BDO to sift through the companies’ books. Ofgem’s investigation commenced in March, when the organisation said that it had evidence that the energy firms were ramping up prices much more quickly than when they were reduced when the cost of energy fell.
British Gas, E.On, Npower, Scottish Power and Scottish & Southern Energy have all announced price increases of up to 18 per cent for gas and electricity over recent months. EDF is the only one of the six major energy firms to not announce rises in prices.
It’s been a torrid time in the press for energy companies over the past few weeks - their door-to-door sales teams have been accused of ‘Del Boy’ sales tactics by the Energy and Climate Change Committee, while British Gas was slapped with a £2.5 million fine for poor handling of customer complaints.
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