The energy firms that will rip you off

Robert Powell takes a look at how energy companies are profiting while the rest of us are shivering

As many of us were coping with the snowfall over Christmas, there were a few people who were enjoying a windfall.

Yes, as temperatures dropped across the country, energy tariffs rose as five of the ‘big six’ energy firms upped their rates.

But they’re not the only companies that have been cashing in on the recent cold spell...

DCC Energy

DCC Energy is an oil company that owns several smaller firms across the country. Chances are there’s a DCC owned company in your area, a quick Google should bring up a complete list.

Earlier this month, dissatisfied customers accused it of profiteering by hiking up oil prices to levels far above the commodity value of the fuel. It’s alleged that DCC has increased rates by 60% since November, when the commodity price of Kerosene has actually increased by less than 10%.

What’s more, DCC Energy has also been accused of manipulating a price comparison site in order to force customers to pay over the odds for their oil.

The site in question, BoilerJuice, markets itself as an independent site that will find the cheapest oil prices in any area. But it’s actually owned by DCC Energy and earlier this month was found to be listing prices that were up to 60% higher than genuine, local oil companies were charging.

The Office of Fair Trading is now monitoring DCC Energy pricing practices but the company has defended the rate increases, putting them down to product shortages caused by the severe weather conditions.

Still, any firm that charges 60% more than another is ripping you off, in my opinion.

If you are planning on filling up your boiler it’s always a good idea to phone around a few local companies direct to get a rough idea of how much you should be paying.

Another good way to save money on your oil bill is to ensure your boiler is regularly serviced and only switched on when you absolutely need it to be. Keeping an eye on yearly fluctuations of oil prices and buying when the market dips is also a good habit to get into.

First Utility

Independent energy provider First Utility is another company whose pricing practices have recently attracted the beady eye of the regulator.

Earlier this month Ofgem told First Utility to change its pricing policies for hard-up and vulnerable customers. The energy regulator has begun enforcement action because the gas and electricity provider was not offering appropriate energy plans for elderly, disabled and chronically sick people, as well as those in financial difficulty. Talk about ripping people off!

This isn’t the first time First Utility has come under fire due to its pricing policies. Back in December consumer rights group Consumer Focus wrote to Ofgem to highlight “confusing tariff behaviour and unclear price rises”. First Utility was accused of increasing tariff rates for new customers shortly after they signed an initial contract.

General price rises

As I mentioned earlier, First Utility isn’t the only energy provider to increase their prices recently. In fact, rate jumps have been so widespread it’s hard to find a utility company that hasn’t pushed its prices.

E.ON, npower, Scottish and Southern, British Gas and Scottish Power have all upped their tariffs in the last two months. And as we reported in The secret energy price rises that affect you!, the final member of the ‘big six’ group of energy providers, EDF Energy has recently shifted customers from its cheap Online S@ver tariffs to their pricier standard rates.

As well as the obvious impact of price hikes, the confusing policies offered by many energy providers can also lead to major rip-offs if you’re not careful.

It all goes back to the Complex Pricing tricks employed by many companies. You can read a full explanation of this scheme by heading over to this article, but in a nutshell, complex pricing relies on the presence of several different charges and add-on fees to distort the actual value of the product. This means you can’t easily compare goods and services, making it harder to get a good deal.

The sheer number of policies available by energy providers, along with small print relating to the variability of the rates adds into this confusing pricing practice.

Recent question on this topic

• chicitalian asks:

  To save on oil is it better to turn off radiators in rooms that are not in constant use?

  • 
    JoeEasedale answered "Not if the temperature drops so much that things freeze up. Loss of oil through a leak more..."
  • 
    chicitalian answered "I don't understand your answer. I have the heating on and all the radiators on except for..."
  • Read more answers

Commodity or right?

What many of these energy related tiffs boil down to is not so much a disagreement over price, but a disagreement over the basic role of the energy provider.

Yes, utility companies are privately owned, commercial businesses and hence we should expect them to make profit. But even the most hardened of capitalist should be able to see that the product of an energy company is not the same thing as the product of a high end electronics firm or designer fashion label.

Thousands of people depend on energy companies every day to provide them with the gas and electricity they need to live. That’s not to say that energy should be a right, but it does leave something of an open goal when it comes to consumer exploitation.

But does that mean that those who can’t afford heating should be placed on special policies? Or should energy be treated like any other commodity – if you can’t afford it, you can’t have it?

Let us know your thoughts in the comment box below.

And for some tips on how to fight back against utility companies read The secret trick you can use against your energy provider or to find out how you can save around 10% on your electricity bills without changing supplier check out VPhases voltage optimisation technology.

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