Pressure to mount on 'Big Six' energy firms in 2014

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'Big Six' energy companies
'Big Six' energy companies Photo: PA/PA Wire

New year, same companies under attack. As the energy watchdog brings in simpler bills for consumers today, they accuse the power networks of having "questions to answer" over the Christmas storm blackouts, and Labour claims that the 'Big Six' have been overcharging customers by billions just to bump up their profits.

On the first claim, the power companies are already to be hauled in front of MPs to explain why it took so long to restore power to thousands of households around the country who lost their light and heat during the storms. Heavy weather is unlikely to be enough of an excuse to explain away the pace at which families were helped. Now it seems the regulator Ofgem will be making its own inquiries too.

Read: Power restored to all homes after Christmas storms

A workman works on repairing electricity lines near Reigate in Surrey
A workman works on repairing electricity lines near Reigate in Surrey Credit: Steve Parsons/PA Wire

Read: Areas worst hit by power cuts after storm

And on the second, Labour has made accusations this morning that the 'Big Six' are inflating the price of electricity they buy from their own power plants, or doing deals to buy power from other sources at prices far more expensive than they need to be. They claim this costs the consumer up to £4 billion.

The energy companies, unsurprisingly, deny the allegations. While it is easy to understand why they might charge a lot for the power from their own plants, and this point has never really been truly settled, it is less easy to see why they would pay other suppliers more than they need to. They are firms who drive hard bargains, and margins are tight.

In truth though, as Ofgem has said this morning, the way the market works is just too murky for us to be able to tell exactly what is going on and who is paying who for what and when. But the accusations show that, as consumers cope with rising bills, the pressure on energy firms in 2014 looks like being just as intense as during the last twelve months.

Read: Power firm offers £40 per head for cut-off customers