Page last updated at 05:00 GMT, Tuesday, 21 October 2008 06:00 UK

Many energy bills 'unjustified'

Gas generic
Energy firms claim customers are getting a good deal

Gas and electricity customers may be paying hundreds of pounds a year more than is justified, a former energy consumer chief has said.

Former Energywatch chief executive Allan Asher told BBC File On 4 that annual bills of around 1,200 could be cut by a third or more.

He said more vigorous competition between energy companies and reformed wholesale markets would reduce bills.

But suppliers say customers are already benefitting from competition.

Mr Asher, who was head of Energywatch for five years until it became part of the new consumer watchdog Consumer Focus in September, argued that household dual-fuel bills could be cut by 300 to 400 with tougher regulation and market reforms.

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Listen to File On 4, Radio 4 Tuesday 21 October 2008 2000 BST, repeated Sunday 26 October 1700 BST
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He said the level of household bills depended more on the capacity of the big companies to extract money from consumers than on the underlying costs of the industry.

The energy markets are already under investigation by the regulator Ofgem but Mr Asher wants a probe by the more powerful Competition Commission.

"The powers of the Competition Commission are clearly greater than those of Ofgem," he said.

"They have the capacity - in fact they're waiting for just a reference and it's scandalous that it hasn't been made yet."

The Energy Retail Association said: "Mr Asher doesn't provide enough detail to explain how he arrives at this judgement."

It said a recent Ofgem investigation had concluded that "customers are benefitting from vigorous competition and suppliers compete on price and quality of service to win customers".


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