Jason Rust: Government malaise is generating energy suppliers' greed

Published on Saturday 24 January 2009 10:12

THIRTY years ago in Kentucky, President Jimmy Carter commented of the USA, "two problems of our country – energy and malaise".

True in Edinburgh in 2009. There is a tremendous inequality in the energy market and there is also a malaise at government level and with Ofgem in dealing with this recognised inequality.

Gas and electricity suppliers need to be banned from charging a premium to customers on pre-payment meters in order to assist vulnerable Edinburgh consumers. This practice is completely unacceptable.

Suppliers also need to clarify the tariff which consumers in Edinburgh are on and the savings available by transferring and how to do so.

Unfortunately, some of the poorest people in society are forced by power suppliers to use pre-payment meters, which results in them paying on average 225 more per annum for their gas and electricity than those who pay by other means.

While it may be legitimate for power suppliers to insist that some customers have pre-payment meters, it is certainly unjustifiable and immoral to charge them more for their gas and electricity. The cost of power supplies to pre-payment customers ought to be cut to the same level as that for direct debit customers. Companies cannot hide behind the excuse that these are more costly to administer. Let's not forget the estimated 9 billion windfall received by energy generators from the free availability of permits under the EU Emissions Trading Scheme.

Despite the price of oil being on a steep downward trend and being linked to the price of the gas the UK imports from the Continent to supply homes and to generate electricity, millions of households face fuel poverty over the winter months.

A local survey of residents in Clovenstone and Murrayburn recently highlighted the significance of rising energy costs to hard-pressed consumers, who may often live in poorly insulated property.

Yet many Edinburgh consumers may be paying too much for their energy not simply because of the penalties for customers with pre-payment meters but also because of the bewildering complexity of the different social tariffs that are available.

Social tariffs require to be standardised and offered to all vulnerable households and it needs to be made clear on bills whether customers are receiving the cheapest possible tariff and how much they could save by switching. Ofgem requires to have some teeth.

Hot air is of no use. Strong and decisive action is needed. Taking on the might of the corporate energy giant and winning should not be the preserve of legal fiction.

Tackling this market injustice is a cause for the energy of all in Edinburgh.

Jason Rust is councillor for Colinton/Fairmilehead Ward