Green energy costs get amber light from consumer watchdog

Consumer Focus welcomes the opportunity to feed into the Government's consultation on electricity market reform and that the Government has identified lower long-term energy bills as a measure of success for electricity reform.

However the watchdog is highlighting the risks posed by consumers being asked to write a blank cheque to fund this.

In response to Chris Huhne's comments on electricity market reform today, Audrey Gallacher, Head of Energy at Consumer Focus, said: ‘Cutting our carbon emissions and improving our energy supply is clearly essential but will come with a big price tag. Consumers can't be expected to write a blank cheque to fund this.

‘The Government must not lose sight of the fact that the energy industry tends to pass costs through to consumers with impunity. The talk from energy firms seems to be about preparing consumers for the pain of higher bills, rather than keeping costs down. So the challenge of this review is to ensure that consumers feel as little pain as possible.

‘There must be some restraints on the level of cost that will be passed to energy customers. A balance must be found on how this is funded between Government, energy customers and the industry. Improved energy efficiency measures are also needed to help mitigate rising prices, particularly to help the poorest customers who will be hardest hit by increased costs.'

To pull off the three challenges of reducing carbon, making energy supply more secure and keeping prices affordable is one of the biggest and most complex economic facing the UK. Consumer Focus is warning that all three of these challenges must be met and the affordability of consumer prices must be an essential measure of the success of the electricity market review.

Consumer Focus is also highlighting that today's announcement comes on the heels of applications for the Warm Front energy efficiency being frozen yesterday. Funding for the Warm Front scheme has also been drastically cut for the next two years. The consumer watchdog is concerned that the poorest households could be left without the help they need to cut their bills and keep their homes warm if funds from energy firm-run energy efficiency schemes are not directed more effectively to the most vulnerable households.