Energy firms to be quizzed by MPs about bills
Energy chiefs will be asked to defend expected future rises in fuel bills when they appear before MPs on Tuesday.
Domestic suppliers are under pressure to explain pricing intentions after the BBC learnt that household energy bills could rise by up to 40% this winter.
Industry sources have suggested households could pay £400 more a year on average for gas and electricity.
Suppliers have said they are reacting to the sharp jump in wholesale gas costs, triggered by rising oil prices.
Executive parade
The wholesale gas price is closely linked to the price of oil, which itself hit a record high of just under $140 a barrel this month.
Industry research has suggested wholesale gas prices have risen by more than 70% in 2008. Last month, Centrica - which owns the UK’s biggest energy provider, British Gas - signalled that gas prices for customers could increase again later this year.
Centrica’s chief executive Sam Laidlaw is among senior industry figures due to appear before the Commons Business and Enterprise Select Committee on Tuesday.
Centrica office
Centrica will be among the companies giving evidence to MPs
MPs, who are looking into competition in the retail energy market, want to know what suppliers expect to happen to fuel bills over the winter
They will also press energy chiefs on the extra help being given to low-income and disadvantaged households to help them with the impact of rising bills.
Watchdog Ofgem, which is conducting its own probe into the market, outlined plans last month to share data on people on low incomes with energy companies to help people pay their fuel bills.
The proposals, which must be approved by Parliament, are designed to ensure that financial assistance for fuel payments can be better targeted at the elderly and vulnerable.
Fuel poverty
The government estimates that 2.5 million households are in fuel poverty - defined as when more than 10% of household income is spent on fuel bills - but watchdog Energywatch says the figure is more than four million.
A 40% rise in average fuel bills would be far higher than expected and would put more pressure on homeowners already struggling with higher food and fuel costs.
However, some analysts believe the increases will be closer to 25%.
It is thought that any price announcements are most likely to come in August, when energy bills are not at the forefront of people’s minds.
But there is a great reluctance in the industry to be the first to reveal a big rise, so the rises may be unveiled in stages.
The chief executives of Scottish & Southern Energy, NPower, EDF Energy and E.ON UK will also attend the meeting while Scottish Power will also be represented.
Source: BBC