Ofgem: Energy Firms Overcharging Customers

Energy companies are overcharging “the vast majority of people”, according to Dermot Nolan, a chief executive of industry regulator Ofgem.

Nolan revealed that wholesale energy cost account for nearly half of a domestic bill, which have fallen by a third over the last year and a half. However, prices have no fallen.

If households were not overcharging customers, perhaps people could make energy efficient installations to make savings, and this could be a factor in the Government’s decision to pull the plug on the Green Deal, as not enough were signing up to the agreement.

The energy market is a competitive one according to Energy UK, and people could choose between 34 suppliers to find the most cost-effective deal and save hundreds of pounds.

The news from Nolan is particularly confusing and intriguing as energy supplier NPower has previously said that energy costs could rocket up by £200 by 2020, almost directly contradicting his claims.

It has been claimed that 70% of consumers are on standard variable tariffs which haven’t really seen change since early 2015.

As a result of all of this, pressure is mounting on the UK’s biggest six energy suppliers to cut their prices as statistics have illustrated that the price of wholesale gas and electricity was at a five-year low at the end of last year.

It remains to be seen what impact the reports of energy firms overcharging customers have upon energy suppliers.

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