October 23, 2013 / 7:49 AM / 4 years ago

MPs to quiz energy bosses over price hikes

LONDON (Reuters) - MPs plan to quiz energy company bosses next week over big increases to household gas and electricity prices, in the midst of a political row over rising energy costs.

The Energy and Climate Change Committee said on Tuesday it wanted bosses from the country’s big six energy firms, as well as other smaller suppliers, to explain and justify the rises and had invited them to appear before MPs on October 29.

The leader of the Labour Party, Ed Miliband, put rising energy bills at the heart of his campaign for the 2015 election last month when he said he would freeze prices for 20 months if his party wins power.

Since his pledge, three of the country’s biggest energy suppliers - Centrica (CNA.L), RWE npower (RWEG.DE) and SSE (SSE.L) - have lifted their prices by over three times the rate of inflation.

“The Committee has today decided to call in the energy bosses in the context of the latest wave of price increases,” MP Robert Smith said in a statement.

Energy prices have already risen 24 percent over the last four years, according to regulator Ofgem, ramping up the pressure on household finances at a time of stagnating wages.

All three companies have blamed the price hikes on rises in the wholesale price of energy, the cost of using the national grid and levies attached to government social and environmental programmes.

The coalition government has responded to Labour criticism and consumer anger over the increased charges by encouraging people to shop around for the best deals.

The hearing next Tuesday will also explore ways of improving the transparency of energy company profits, the committee said.

Centrica, for example, which said earlier in October its British Gas unit would raise prices by 9.2 percent, posted annual operating profit of 2.6 billion pounds in 2012.

Iberdrola’s Scottish Power (IBE.MC), which on Tuesday was fined by the regulator for mis-selling its products, EDF Energy (EDF.PA) and E.ON UK (EONGn.DE) make up the remaining big six suppliers in Britain.

Analysts say those three providers face the same cost increases and will likely also raise prices in the coming weeks.

Reporting by Sarah Young; Editing by Mark Potter

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