U.K. Treasury Chief Concerned about Rise in Utility Prices

Alistair Darling, head of the U.K.’s treasury, requested a meeting with the U.K.’s independent energy regulator to talk about whether rising utility prices are justified.
Darling sought to know why companies are seeking double-digit increases.  Ofgem, the regulator, will be meeting with Darling to provide an assessment of the electricity and gas supply and market conditions both in Europe and in Britain.
“I would be particularly interested in your views on the relationship between wholesale price movements and feed-through to domestic retail prices,” Darling wrote to Ofgem.
Darling also wanted to know about future trends.
Last week, energy supplier Npower informed consumers in Britain that they must pay increases of 17.2 percent for gas and 12.7 percent for electricity. The announcement gave heed to some worries that other power companies may follow suit, which would undermine the government’s anti-inflation strategy.
Karl Brookes, a spokesman for consumer watchdog Energywatch, commented that the market is not necessarily advantageous to consumers at the moment.
“We are pleased this review is taking place,” he commented. “If you believe we are in a fully fledged competitive market, you would expect suppliers to respond in a more innovative way than instantly responding to wholesale prices by hitting the consumer in the pocket.”

www.ofgem.gov.uk