Utility firms refuse to sign energy deal to assist the poor

Following a refusal to sign up for a deal by the “big six” utility firms, a £1 billion fuel-poverty package sponsored by the UK government has gone awry.

Prime Minister Gordon Brown’s undersecretary of state with the Department of Business, Baroness Vadera, is said to be spearheading the effort. She held last-minute negotiations with top officials from UK’s foreign utility firms. They included EDF from France, German firms Eon and Npower, and Scottish Power a subsidiary of Spanish company Iber-drola. This was a last-ditch effort to rescue the deal, say news reports.

Domestic utility companies, however, have for the most part agreed to the deal. They include Centrica, Scottish and Southern Energy.

According to the proposal, the deal would provide a commitment for the companies to shell out £750 million in a 5-year time span into the fuel-poverty schemed backed by the government. The industry has already promised £225 million in the beginning of the year.

Following a second hike in energy prices last week by Npower and Scottish Power, the government has fallen under pressure to tackle the issue. Fuel poverty may be measured by the number of individuals who spend over 10% of their earnings to pay for their energy bills - that number in the UK has now skyrocketed to more than 5 million.

The hesitation of the foreign utility firms is understandable since making concessions in the UK may well mean concessions in their home countries as well, say published reports. Nonetheless, the government of Britain is set to launch this package on Wednesday, September 3.

Please visit www.edfenergy.com, www.eon-uk.com, www.npower.com, www.centrica.co.uk, www.scottish-southern.co.uk and www.scottishpower.co.uk for more