Everyone has seen the news stories over the last few days regarding the so-called 'big six' energy companies raising their electricity and gas prices. While the average rise - note: not the highest - of customers' bills was widely reported, and acknowledged by the companies themselves, to be 9 percent, Ofgen, the energy regulator and watchdog, noted that wholesale energy prices have in fact only increased over the relevant period by 1.7 percent.
While the energy companies have attempted to minimise the impact of the inevitable public backlash over these figures by releasing the usual carefully prepared PR statements, today representatives of the companies in questions were forced to go before a parliamentary select committee and explain their price rises; essentially defending themselves against understandable accusations that they were ripping their customers off.
The three hour confab featured Tony Cocker, the Chief Executive Officer of E.ON, William Morris, the Managing Director of SSE, Guy Johnson, the External Affairs Director of RWEnpower, Stephen Fitzpatrick, the Managing Director of Ovo Energy, Neil Clitheroe, the Chief Executive Officer for Retail and Generation of ScottishPower, Ian Peters, the Managing Director for Energy of British Gas, Martin Lawrence, the Managing Director for Energy Sourcing and Customer Supply of EDF Energy, Ramsay Dunning, the Group General Manager for Co-operative Energy, and Andrew Wright, the Interim Chief Executive Officer of Ofgem. So this was a collection of very highly ranked individuals within the British electricity sector.
It is difficult to fully cover all of the arguments and debates that were put forward during the three hour discussion, but the key arguments can be conveyed reasonably. Perhaps the entire tone of the energy companies' representatives was best embodied by one statement by William Morris of SSE, who stated that "we profoundly regret" the price rises in question. I can report that he kept a straight face as he said it.
The defence that was put forward by the energy companies centred around three key points. Firstly, they claimed that they'd been forced to incur expenses related to so-called 'green energy', and that this had been reflected in the price rise. Secondly, they stated that Ofgem have revised their 1.7 percent figure, which they'd admitted to be inaccurate. Thirdly, the energy companies generally disputed the fact that they'd raised their prices by 9 percent, and attempted to break down the increase into what sounded like more reasonable figures, by what I can only describe as creative accountancy and highly specious arguments.
Let's take the third of those points first. It was proven by the Energy and Climate Change Select Committee overseeing the discussion in about two minutes that the claims regarding the price rises being smaller than they appeared simply didn't add up. The energy company representatives really had nothing of substance to respond with on this, anyone can look up the figures, and trying to cloak them in a miasma of spurious mathematics and meaningless arguments simply makes them look ridiculous.
With regard to 'green energy', let's just assume for the sake of argument that their claims are legitimate. I will pose the following two rhetorical questions: did anyone ask you whether the energy companies should switch to the production of 'green energy' (bear in mind that so-called 'green energy' includes nuclear power)? And considering that I'm assuming no-one asked you, is it therefore reasonable for multi-billion pound companies to pass the expense on to everyday people of modest means? This is where 'democracy' falls down time and time again; our so-called representatives are not accountable under the existing system.
Finally, I have researched the matter, and can see absolutely no evidence whatsoever that Ofgem have withdrawn their 1.7 percent figure, so this just seemed to be a completely baseless assertion.
Now let's look at the financial position of the energy companies. One of the companies represented at this meeting, E.On - who supply my electricity, God Bless them... - are the 99th biggest corporation in the world according to the authoritative Forbes magazine. They are the 13th biggest in terms of sales. They made a profit of $2.9 billion last year (these are their own figures). Yet to hear their representative speaking during the select committee meeting, you'd think they were on the verge of bankruptcy!
There is simply no justification whatosever for this hike in prices at the worst time of year for the average consumer. It will put vulnerable people in the dangerous position of having to decide whether or not they will heat their house over the winter. This is morally reprehensible for any conceivable reason, but when it is motivated by plain and simple greed, by shareholder profit and nothing else, then it becomes nothing short of a disgrace.
Can we trust a government that allowed Royal Mail - which was built due to generations of blood, sweat, tears and taxes from the British people - to be sold off to hedge funds and private equity to do anything about it? I'll humbly leave the readers of this article to decide for themselves...