Some of the Big Six suppliers seem frustrated by the warning given by the energy regulator Ofgem and the UK government to ease out energy prices. Scottish Power reacted to the situation by calling the UK government a mess and has asked the ministers to contemplate over the issues. Authorities at the Scottish Power have clearly stated that the government should choose between allowing free trade and full price regulation.
The company with roots in the Spain has asked the UK ministers to have a clear vision about the energy market. It wants the current government to take a stand on whether it wants to create a competitive market where the companies can increase or decrease the prices or it wants a regulated price system, like other countries. It wants a clear cut decision which can be utilised as a base its future decisions.
Keith Anderson, the chief corporate officer of Scottish Power spoke on the matter by saying that “Either believe in the competitive market or have a regulated market, a halfway house is a mess.” Ignacio Galán, chairman of Scottish Power’s parent company Iberdrola, also gave his opinion by saying that “Keith [Anderson] and myself have already said this very many times to different officials: Do you trust, do you believe in the liberalisation and in the free trade economy? Or would you like to be a fully regulated economy? I am not opposed.”
The company also hinted that the price rise is not just due to the increase in wholesale prices but also due to the costs which fall outside the control of the utility companies. They mentioned other costs like those involved in installing smart meters as well as the transmission and distribution costs. In addition, the company’s retail margin has also fallen by more than 4% in 2016. To this, the Ofgem chief Dermot Nolan said that “there can be explanations to price increases by specific companies. However, any verdict by the ministers on price regulation would be very understandable.”
Shay Ramani, the founder of FreePriceCompare.com, expressed his views on the situation by saying that “Suppliers will always have reasons for price rise, some of them would talk facts but, it cannot be denied that the customers who are at the receiving end suffer a lot due to increase in home energy prices. The government and Ofgem should take action for this as all the customers can do is switch or suffer.”
To conclude, the Big Six suppliers are questioning the government about their decision to choose between free trade and compulsory regulation of energy prices. Whatever be the case, the customers should be prepared to conserve energy to get smaller energy bills. Otherwise, they should opt for switching the supplier to get the benefits of introductory offers from the new supplier along with cheaper tariffs. However, one needs to be ready to analyse the best or cheapest of all UK energy suppliers and then choose the one that suits.