Tag Archives: British Gas

Britain, Energy, Environment, Government, Politics, Society

Concern over energy firms refusing to pass on price cuts…

ENERGY BILLS

Intro: Millions of energy consumers on fixed deals will lose out

Millions of energy consumers with fixed price energy tariffs will not get a £50 reduction in utility bills as promised by David Cameron and George Osborne. A pledge was given this week in the Autumn Statement that electricity bills would be cut following the decision by the government to roll back some green levies.

The energy giant E.ON has announced that more than one million of its customers will get a reduction of only £12 – or 23p a week.

EDF is taking the same line with its one million fixed rate customers, who include many pensioners and families. Npower, SSE and Scottish Power may follow suit.

The Prime Minister, Chancellor George Osborne and Energy Secretary Ed Davey have made repeated pledges in their efforts to protect customers by rolling back environmental charges.

Mr Osborne said this week: ‘There’s going to be an average of £50 off people’s bills … We are absolutely insistent that this is going to be brought in.’

The smaller reduction of £12 covers the Government’s decision to switch funding of the Warm Homes Discount – a subsidy for poorer families – from energy bills to general taxation. The rest of the decrease was expected to come from changes to the Energy Companies’ Obligation Scheme, a levy applied to all bills to raise money for energy-saving measures for poorer households.

However, the element of the reduction is not being passed on to customers on fixed tariff deals by some companies.

In contrast, British Gas, the largest of the ‘big six’ suppliers, announced that all tariffs and payment methods will get a reduction of £53 from January 1.

A spokesperson for Consumer Futures, a campaign group, said: ‘The message has been that people were going to save £50 on their energy bill, but it seems a fair chunk of people will not get that. This sort of behaviour is not going to do anything to reassure customers … People feel confused and angry about their energy bills. This latest development just adds insult to injury.’

The spokesperson added: ‘I think in the current climate, bearing in mind how people are struggling, the right thing to do would be to apply the full reduction across the board. That is the expectation that the Government has created.’

Following the Autumn Statement, E.ON immediately announced a price rise of almost £60 a year for customers on standard tariffs. The changes will take effect from January 18.

The provider says that cutting the bills of fixed price customers by only £12 was justified because many of these people were already on relatively good price deals and tariffs.

EDF took a similar line and said its short-term fixed deal is some £90 a year cheaper than its new standard prices.

Related:

Standard
Britain, Economic, Energy, Environment, Government, Politics, Society, Technology

Fracking and drilling for shale gas…

SHALE TRAIL

Will the UK Government’s latest ‘dash for gas’ with fracking be a golden repeat of the North Sea oil boom or become a serious risk to public health and safety?

Opinion is divided between green opponents of attempts to cash in on the controversial resource and those proponents who argue vast deposits of gas below much of the country will dig Britain out of its energy crisis.

The debate has been stoked following claims in June by the British Geological Society that there could be more than 1,300 trillion cubic feet of shale gas under the North of England alone.

At current predictions, around 10 per cent of this should be recoverable – enough to fuel the nation for about 40 years, according to supporters.

And last month Chancellor George Osborne unveiled some of the most generous tax breaks in the world to kick-start this energy revolution in Britain.

The Treasury says that taxation on shale gas will be cut from 62 per cent to just 30 per cent, which the Chancellor reckons could boost investment in the industry to £14 billion a year.

It won’t just be companies that will gain. Local communities in those areas where extraction takes place will scoop 1 per cent of production revenues, as well as £100,000 per fracking well.

The United States has already benefited from its own shale gas boom, relying far less on oil imports now and providing energy consumers with a much cheaper alternative. According to the ratings agency Moody’s, the shale gas boom in America has generated more than 1 million US jobs.

For investors, too, the potential is huge.

If fracking’s potential is as good as we’re being told it could be, there will soon be a surge in profitability, rising share prices and attractive returns on offer for shareholders of those firms leading the charge. While there remains a long road to travel yet in terms of legislation and testing, the excitement building in the City of London is tangible.

Companies with licences for British shale areas have understandably welcomed the tax break announcements by the Chancellor. Those set to benefit include Aim-listed IGas and Dart Energy, equipment-maker John Wood Group and British Gas-owner Centrica – which acquired 25 per cent of Cuadrilla Resources in June.

Of course, the environmental concerns have to be weighed against the commercial benefits. But even the most ardent green lobbyist must recognise that Britain is facing a crisis of epic proportions when it comes to security of energy supply.

The UK is already a net importer of gas. Any interruption in supplies risks hiking up domestic and business energy bills or even seeing some customers cut off. Our coal-fired plants are closing or already shuttered.

Meanwhile, nuclear energy is in disarray with no new plants likely for at least another decade. There is still no sign of agreement on the crucial strike price – the guaranteed minimum EDF would get for power generated at a new plant.

Green technologies like wind are as yet incapable of fulfilling all our everyday energy needs.

The introduction of a tax regime that levels the playing field for shale gas with small offshore oil and gas fields must surely be a welcome step in the right direction.

But the industry will need to be tightly regulated to minimise the chances of something going wrong. Lobbyists have legitimate concerns over the chemicals used in the fracking process contaminating local water supplies, and the anecdotal evidence elsewhere that drilling for shale gas can increase the risk of earthquakes.

Drilling and fracturing must be strictly controlled. Three government agencies, plus the local authority, will have to sign-off on every project. Environmental impact assessments will be necessary along with permits to be agreed before fracking begins.

Standard