Orkney and Shetland MP, Alistair Carmichael, has condemned the news today that energy regulator Ofgem will allow the energy price cap to rise by £139 in October. Regulator Ofgem has said that the price cap for default domestic energy deals would be raised to cover suppliers' extra costs due to changes in wholesale energy prices.
The typical gas and electricity customer is likely to see their bill go up by £139 to £1,277 a year. Ofgem has recommended that customers look at switching suppliers, however this has proven challenging in the isles with some people wrongly told by suppliers that they could not switch.
Beatrice Wishart MSP and Alistair Carmichael have pressed Ofgem to investigate local complaints about energy supplier behaviour; the watchdog has yet to report back on this investigation.
Commenting on the news, Mr Carmichael said:
“Ofgem talks about rising wholesale prices and that may be true but it never appears to stop energy suppliers making enormous profits, particularly on generation rather than retail. Meanwhile those at the margins disproportionately pay the price.
“The open market is clearly broken in the energy sector and that is nowhere more true than in the isles. When the market is not working that is when the government needs to step in.
“In the isles we generate enormous amounts of energy with capacity growing all the time. It is hard to understand therefore why we also have some of the highest rates of fuel poverty in the country. As we become more closely linked to the National Grid and the export of energy it seems only fair for the governments to offer a different tariff for the isles so that we can tackle our disproportionate fuel poverty rates for good.”
Peter Smith, director of policy and advocacy at fuel poverty charity National Energy Action said:
“This is a devastating increase. Millions of household budgets are already stretched to the limit and this massive increase could not be coming at a worse time.”