Controversial new rules that allows suppliers to increase their tariffs without the need to advise consumers for a period of up to 65 days has been slammed by a leading consumer group.

This power bill scam has been highlighted by the consumer protection group, Which who have been calling on the industry regulator Ofgem as well as the UK Government to ban the tactic.

Under the new regime, a family or a business can be paying higher gas or electricity tariff for more than two months without their knowledge. Additionally, which claim that the delay in notification also deprives the customer the opportunity of shopping around to look for a less expensive tariff?

Which officials are now claiming that the new rules, applying as they do, to all power suppliers, might even be illegal. If this is proven to be the case, consumers whose tariffs have been raised without prior notice may be eligible to launch a legal test case and claim for substantial refunds.

The UK courts as well as the Office of Fair Trading have previously established that contracts allowing a company to increase a charge without notice are deemed as illegal. A case worthy of comparison are UK banks who were ordered to repay hundreds of thousands of pounds to customers, after they were charged inflated exit fees on mortgages that were put up without consultation or notice.

Research by the consumer champion shows that 98 per cent of consumers hold the belief that suppliers should be required by law to notify them ahead of price rises, with almost the same percentage insisting that their current supplier of utility services should be legally obliged to notify them when a cheaper tariff becomes available.

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Tags: Banking, British Economy, consumer protection, Credit Crunch, Current Account, Economics, Economy, Financial News, Money, Money Management, Office of Fair Trading, Ofgem, power suppliers, Recession, Retail, scam, UK Banks, UK courts, UK Economy, UK Recession

Apart from a few hiccups during the global financial downturn, investor Warren Buffett has gained a reputation as a man who knows where to put his and his shareholders, money where the profits will follow. The news that Buffet is considering making a £1 billion investment in the UK green energy revolution has certainly created a bit of excitement in the world of energy.

The UK government have made no secret that they see Britain as the future world leader in offshore wind energy generation. However in order to harness the energy both for internal consumption but also for export to Europe, hundreds of miles of undersea cables to bring the electricity ashore will need to be laid.

This network of cables is expected to cost more than £12 billion to supply and place before the project is completed. In order to finance the operation, UK regulator Ofgem have launched a series of auctions for the rights to build and maintain the offshore wind energy infrastructure.

In the first phase of the project, investors have been invited to bid on the connections for nine offshore farms, some of which that have been built or are in construction or advanced planning stages. The wind farms are all situated off the coast at Kent.

Buffet’s company Mid-American Energy, having passed the the qualification stage, are expected to place a bid on the project to build and maintain the networks for the next twenty years.

Other candidates for the project include the UK National Grid, RWE, Scottish and Southern Energy, Macquarie, Transmission Capital and IFM. Other international competitors for the tender are Norway’s Statkraft, as well as Dong of Denmark.

The auction is expected to raise £1.15 billion, with two larger auctions covering future networks will be launched after next summer’s sales. In the meantime, Buffett is remaining non-committal on future participation.

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Tags: Dong of Denmark, financial downturn, IFM, Macquarie, Mid-American Energy, offshore wind energy, Ofgem, RWE, Scottish and Southern Energy, Shareholders, Statkraft, Transmission Capital, UK government, UK green energy, UK National Grid, Warren Buffett

Continuing claims of unfair overcharging is making UK energy suppliers feel hot under the collar. And the people who are making them roast are Ofgem, the UK energy regulator whose role it is to crack down on companies who vary from the tariffs that they are legally obliged to charge the consumer.

A recently code of practice providing a whole new list of conditions designed to protect the interest of consumers and members of the business community will protect against well know “gypping” practices initiated by energy companies, particularly price discrimination against customers in the lower income bracket. These can be either families or occasionally small, usually family run businesses that use prepayment meters to settle their energy bills in advance, instead of the methods preferred by energy suppliers, particularly direct debit.

Under the new legislation, Ofgem end to put a stop to unfair practices against those who prefer to prepay their energy accounts as well as putting a stop to energy company’s insistence on demanding the automatic rollover of fixed-term contracts, regarded as unfair practice,. Ofgem see it is the consumer’s right to be able to shop around for the best energy supply deal before deciding which energy supplier to opt for.

Currently, having prepayment meters installed results in the consumer being charged a fixed one-off fee of at least £90.00 when they sign up with an energy supplier, where direct debit customers are not required to place a deposit. The aim of Ofgem is to stipulate that energy suppliers will be allowed to charge a fixed sum, yet to be established, but considerably lower than that being paid now for this service.

Also under scrutiny are unfair practices being levied on the 12 million households who prefer to pay their energy bills by direct debit. It has long been the practice of energy companies to encourage their customers to pay by monthly direct debit by offering financial incentives, as being paid quarterly effects their cash flow considerably, by making it cheaper than paying quarterly. However, after considerable research was carried out by Ofgem, it was ascertained that as monthly amounts being charged to the customers was an estimate based on previous history and not after the physical reading of their meter, they were often being overcharged, and any inflated charges were not being refunded after the meter was physically read. In answer to claims by some energy companies that energy bills “leveled ” out over the year, Ofgem’s research showed that in many cases, consumers were paying for as much as 13% more for energy than they actually received, against those who paid quarterly after their meter reading was recorded.

In the long term, the new legislation will insist that energy companies will provide their clients with an annual statement, detailing tariff information, written price quotations as well as their clearly stated rights to switch energy suppliers without pre-conditions or penalty clauses.

Energy companies who fail to comply with the conditions of the new legislation, which is due to come into effect by the autumn of this year, run the risk of being reported to the Competition Commission.

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Tags: Energy Company's, Energy Prices, Money, Ofgem, Savings, UK energy suppliers