Inquiry urged into energy price rises

The consumer group Energywatch called yesterday for an inquiry by the Competition Commission into the cost of household gas and electricity, after the 14th price rise this year was announced by a major energy supplier.

Scottish & Southern Energy said its 7 million customers faced a 12.4 per cent rise in the price of gas in January and a 9.4 per cent increase in electricity. The move will add more than £100 to customers' average bill, taking the average price of gas to £607 a year and electricity to £374.

It will be the company's third price rise since January and, Energywatch said, would force consumers to make "tough choices about how well they heat their homes this winter".

Alistair Phillips-Davies, energy supply director of Scottish & Southern, said: "It is well known that we have made fewer price increases than all the other major energy suppliers over the past three years and that we have passed on to our customers far less than the full extent of the increase in wholesale energy prices experienced in that period."

Energywatch is a statutory consumer organisation but it does not have the power to force a Competition Commission inquiry. Only the Department of Trade and Industry, the Office of Fair Trading or the sector regulator - Ofgem in this case - can order such an investigation. Energywatch has lobbied ministers and Ofgem over the issue and is considering making a "super-complaint" to regulators.

Allan Asher, chief executive of Energywatch, said an inquiry would not only need to look at "behavioural" issues - such as price-fixing - but also, "structural" problems in the market, such as vertical integration of energy companies, long term contracts and third party access.

Separately this week, the European commissioner for competition Policy, Neelie Kroes, told energy companies she was ready to force energy markets to open up to competition.