Australian Electricity Prices Surge 50 Percent In Five Years

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The U.K’s “big six” energy companies will be grilled by U.K. lawmakers on Tuesday about the reasons behind hiking their consumer energy bills by an average of 9.1 percent just ahead of the onset of winter.

The companies — EDF Energy, SSE, Scottish Power, Npower, E.ON UK and British Gas – have been asked to explain the increases when wholesale energy costs have only gone up 1.7 percent over the past year, according to data from Ofgem, the U.K.’s energy regulator.

With the consumer increasingly angry over bill hikes and politicians calling for more regulation of the energy sector, company bosses are due to appear before the government’s energy select committee on Tuesday to respond to the mounting anger.

The issue has turned into such a political hot potato that the opposition Labour party has promised a 20-month energy bill freeze if elected at the next election and last week, former Prime Minister John Major called for a “excess profits tax” on energy companies’ profits

Gerard Reid, partner at Alexa Capital, a corporate advisory across the energy infrastructure sector, agreed with criticism of the sector, saying that customers in the U.K. had not had a “fair game” in terms of power prices and treatment, compared to their continental neighbors.

“The reality is that what you see in continental Europe is huge price falls across Germany, Franc e and across the board except for in the U.K.” Reid told CNBC Europe’s “Squawk Box” on Monday.

“This divergence has only taken place in the last few years and the divergence is such that the German wholesale power price is at 50 percent lower than the U.K. power price. We need to bring British power prices in line.”

As well as blaming an increase in wholesale prices, the “big six” companies attributed the energy bill increases to higher operating costs and government schemes to encourage investment in renewable energy.

Earlier this month, executives from Europe’s leading energy companies told CNBC that they were pushed to invest heavily in renewable energy and technology by the European Union only to run into rules that differ from country to country, an inadequate Europe-wide emissions-trading system and problems with subsidies.

Read the rest of this article on CNBC’s website.

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