The coalition has unveiled measures it says will knock £50 off the average energy bill, but some of that cost will be absorbed by taxpayers.
Energy firms criticised for 'losing public trust'
Energy Secretary Ed Davey is walking an uncomfortable line by hitting out at the same firms he needs to improve our energy infrastructure.
Energy Secretary Ed Davey is due to meet representatives of power distribution companies later today to discuss the power outages over the Christmas period.
More than a million homes and businesses were cut off over the entire period, including 100,000 on Christmas Eve.
Last week, the energy regulator Ofgem has told ITV News that power networks could face fines if it is proved that they failed to respond quickly enough to reconnect customers.
Energy Secretary Edward Davey called E.ON's price rises announcement "disappointing news".
Bur Mr Davey stressed:
This rise is ... lower than it would have been as a result of Government action to reduce the impact of price rises on consumers.
As part of their announcement today, E.ON have confirmed they will pass on these savings to their customers.
This does not let energy companies off the hook.
The main measures confirmed in Ed Davey's Energy Statement are as follows:
- Government will provide £300m in both 2014 and 2015 - £600m in all - for a new rebate to all domestic electricity customers worth £12 each year
- It will consult on reforming the Energy Companies Obligation to make it cheaper, knocking £30-35 off average bill next year
- The Affordable Warmth and Carbon Saving Community Obligation - schemes which help low-income and vulnerable households - will be maintained at current levels and extended until March 2017
- The electricity distribution network operators will make voluntary improvements worth £5 from the average energy bill
He says these measures combined will result in saving worth £50 on the average energy bill.
Ed Davey says that changes to the Energy Companies Obligation - which drives energy-efficiency measures - will knock between £30 and £35 off the average bill next year.
Energy Secretary Ed Davey gets a lively reception in the House of Commons when he says: "It is right that the government keeps these social and environmental obligations, paid for by energy bill payers, under continuous review".
He adds: "Where we can act to reduce their impact on bills, while maintaining the integrity of our policy, we will."
Energy Secretary Ed Davey is giving an energy statement in the House of Commons.
He began by noting that Britons have seen bills rise every year for the last decade. He said energy companies need to be more transparent about what constitutes energy bills.
Ed Miliband's proposal to freeze energy prices for 20 months if Labour are elected in 2015, will "hurt people", the Energy Secretary told Daybreak.
The energy companies would "push up bills before Miliband's freeze and afterwards", Ed Davey said.
In turn, he claimed, this would "hurt" the fuel poor and "undermine" investment in green energies.
Energy Secretary Ed Davey told Sky News he thinks people will welcome the Government's plans to reduce the impact of rising energy bills.
Asked whether npower's CEO was right to say the proposed saving was dependent on wholesale costs, Mr Davey said, "The £50 is real - that is going to happen - he is right to say that we can't control international markets ... We are keeping our costs down and that will feed through to the consumer.
Mr Davey suggested Paul Massara's comments show the problems with Labour's "irresponsible" price freeze policy.
Energy Secretary Ed Davey has hinted the cost of schemes such as the Warm Homes Discount could be covered by general taxation rather than energy bills.
"We introduced that and we are very proud of it", Mr Davey told The House magazine.
"But the question is should you do that through imposing a £12 plus some other costs on consumer bills? Or could you do it through taxation? Now, taxation is more progressive”, he added.