South Lakes MP Tim Farron has welcomed the news that energy regulator OFGEM will be investigating Scottish Power after they announced an increase of 19% in customer's bills in South Lakeland.
Tim wrote to OFGEM on the 10th June asking them to investigate the price increases, which are affecting people in South Lakeland. OFGEM have today announced they will investigate the matter and the case has a potential to be referred to the Competition Commission to deal with the matter.
Tim is supporting the regulator as it presses ahead with radical market reforms and action to force the so-called "big six" energy suppliers to simplify tariffs.
Scottish Power recently announced it is to raise the price of domestic gas and electricity bills by 19% and 10% respectively from August 2011; they blame the increases on a rise in wholesale energy costs and the volatility in the global energy markets.
However, in 2010 British Gas said operating profits had risen by 24% to £742m. In November 2010, OFGEM said that an energy supplier's net profit margin per typical customer rose from £65 in September to £90 in November, a 38% rise.
Commenting today Tim said: "I welcome the news that OFGEM are going to investigate this matter. I am glad the regulator has acted on my request for an inquiry but this is just the first stage, they must now show they have teeth to back that up. Hard working local families in South Lakeland cannot afford a 19% price rise - it is obscene when the energy companies are making such huge profits! I plan to use that evidence to push the government to look at social tariffs and make sure that these price rises are curbed."
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