Energy firms rapped – but still no action on high prices

Gas and electricity suppliers were ordered to explain how they calculate bills by energy regulator Ofgem yesterday, as they came under increasing pressure from customers facing price hikes this week.

Ofgem made the demands following allegations that many energy users have been overcharged without clear explanation from their suppliers.

The allegations centre on the practice of charging higher rates for units used that were not initially estimated in the bill. Earlier this week EDF admitted to overcharging 100,000 customers between October 2003 and May 2010 because of an fault in its meter reading system.

However, there remained no sign of wider action on the slew of high price rises being introduced across the sector as the latest came intoeffect from the UK's largest supplier, British Gas.

The company has upped its average gas prices by 18 per cent and electricity prices by 16 per cent, just days after it announced half-yearly profits of £280m.

The call for companies to explain their billing follows two attempts by Ofgem to punish malpractice in the last two months. In June it fined British Gas £1m for misreporting how much electricity it was supplying. And in July British Gas was fined a further £2.5m by Ofgem for failing to respond sufficiently to customer complaints.