The energy death spiral grows

Although it is far from obvious, Ofgem – Britain’s energy regulator is supposed to act in the interest of energy consumers.  As the UK government explains:

“The Office of Gas and Electricity Markets (Ofgem) regulates the monopoly companies which run the gas and electricity networks.  It takes decisions on price controls and enforcement, acting in the interests of consumers and helping the industries to achieve environmental improvements.”

This will come as a surprise to the millions of UK households struggling to pay energy bills which are – now state subsidies have been withdrawn – higher this winter than last.  Indeed, we are now entering our third winter of eye-wateringly high energy prices, with no obvious respite in sight… the only consolation being that the closure of Britain’s heavy industries has at least prevented widespread power outages so far.

On the downside though, among the millions of households struggling to pay their bills are thousands – and growing – of households who are in default.  Not least because increased energy costs are hitting just at the point when general inflation has eaten into wages, when the Bank of England has jacked up interest rates (causing rents and mortgage payments to spike) and when governments (national and local) have decided to raise taxes to cover their own excessive debt.

So, what to do about the growing outstanding debt to the energy companies?  A genuinely consumer orientated regulator might tell the energy companies to eat the loss – perhaps taking the hit to shareholder dividends or senior management remuneration.  Alternatively, since this issue isn’t going away any time soon, they might tell government that now is the time to bring an end to this quasi-market farce and take the energy monopolies back into public ownership…

…click on the above link to read the rest…