LONDON Households struggling to pay rising fuel bills should change supplier, check their tariffs, or insulate their homes to try to save money, energy secretary Chris Huhne said after ministers met the "Big Six" energy companies for talks.
Huhne said Monday's meeting was "encouraging" and denied suggestions that, without an actual fuel price cut, the outcome would do little to help fuel consumers.
"This is not small beer," he told reporters. "On an average dual fuel bill of about 1,300 pounds, by switching you can actualy get about 200 pounds off your energy bill."
Huhne has dismissed Labour calls for the government to pressure companies to use growing profit to cut bills, saying it would be wrong for ministers to try to set prices. "This is a market and we have to make sure it is a fair market," he said.
More competition, greater transparency in the wholesale energy market and consumers shopping around would combine to drive down energy costs, he said.
With household finances squeezed, the cost of electricity and gas has shot up the political agenda and the government is under pressure to be seen to be taking action.
The energy summit came as the coalition government faces pressure from angry consumers already feeling the pressure from weak growth, public cuts and tax rises. Unemployment has jumped to a 17-year high, inflation is more than double the two percent target and wage growth is muted.
"The companies are not the Salvation Army. We expect them to earn respectable returns for their shareholders," Huhne told BBC radio before the talks. "But they need to be operating in a fair and competitive market."
More than eight out of 10 customers have never checked to see if they could get a better deal and they should now start to pay more attention to both their supplier and tariff, he added.
Energy bills have risen dramatically in recent months as companies hike prices due to higher wholesale costs, meaning an average dual fuel bill in Britain costs 1,345 pounds a year, the watchdog Ofgem said last week.
The regulator said companies were making 125 pounds per customer in profit, the highest level since at least 2004, compared with 15 pounds in June. Suppliers dispute the figures.
Huhne said companies needed to make a decent return to be able to invest in power stations because a quarter of Britain's electricity generating capacity will need to be replaced over the next 10 years.
In its proposed reforms last week, Ofgem said energy companies would have to simplify their billing and pricing structures which it said were far too complex.
Britain's six largest utilities are German groups E.ON (EONGn.DE) and RWE (RWEG.DE), British companies Centrica (CNA.L) and Scottish and Southern Energy (SSE.L), French operator EDF (EDF.PA) and Spanish firm Iberdrola (IBE.MC).
Ahead of the summit, RWE's npower said it would freeze prices for customers on standard residential tariffs for the coming winter. Centrica's British Gas also announced a pledge not to raise energy prices for variable rate customers this winter.
(Additional reporting by Peter Griffiths)
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