The coalition government energy secretary, Chris Huhne, will pledge today at the LibDem party conference to put in place measures to ‘get tough’ with energy companies and reduce household energy costs.

The first of these is to force energy providers to reduce the switching period from six weeks to three weeks.

Customers will also be able to join Groupon style ‘co-operatives’ that enable them to be part of a bulk-buy set-up so that they can get gas and electricity at the lowest prices on the market.

The energy secretary is also expected to say that measures will be put in place to allow consumers to get potentially unlimited refunds if watchdogs find that energy companies have broken market rules.

Ofgem, the industry watchdog, will also be asked to look at the ‘predatory pricing’ practices of the big six firms heavily discounting prices for new customers only in order to prevent new energy players entering the market.

uSwitch.com has welcomed the moves and Ann Robinson, the director of policy, said: “In a year of double price hikes and soaring fuel poverty, consumers need Ofgem to champion their cause. The hard hitting and meaningful measures announced by Chris Huhne today will allow Ofgem to take its gloves off and will make it even easier for consumers to reject price rises by shopping around for a better deal. In a year when prices have increased by £224 or 21% this is just the kind of ammunition that consumers need.

The main measures to simplify tariffs, bills and annual statements will be very hard to achieve without Ofgem being given additional powers to stop companies from blocking these consumer-friendly moves. We also welcome the fact that Ofgem wants to speed up the switching process to three weeks. This will go some way to reassuring consumers and to building trust and confidence in the switching process.

However, it’s also important that consumers feel that their current supplier is giving them a fair deal and the best way of achieving this is by highlighting the cheapest deals on bills. Once consumers see the savings available it should prompt many more to help themselves by taking advantage of more competitive prices, whether from their existing or a new supplier.

The warm home discount is welcome, but with almost 7 million households now in fuel poverty helping 600,000 just doesn’t go far enough. However, overall this announcement is good news for consumers.”

One of the aspects to this that has been overlooked here is that many people will be paying for the ‘free electricity’ that others get. I am not talking about benefits here, this is to do with the ‘Feed In Tariff’ that those who use solar panels for example receive for generating AND using their own electricity.

This tariff is paid by the energy companies and must therefore ultimately come out of the pockets of those who do not have such microgeneration capacity.

This also then puts costs on the fuel bill of ordinary people.

For more on the Feed In tariff and how you can invest in Solar Power Panels and generate a tax free RPI linked income for 25 years then click here and say you came from The Economic Voice!

Image: Wikimedia commons Steve F

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