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Parliament and Energy Company Licence Revocation


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On 3rd September 2014, the House of Commons debated whether or not new legislation should be implemented to shut down energy companies who repeatedly breach the terms of their licence. It's quite a lengthy debate, but here's the full thing:

 

http://www.publications.parliament.uk/pa/cm201415/cmhansrd/cm140903/debtext/140903-0001.htm (scroll down to column 292)

 

214 voted yes to the proposal, 298 voted no.

 

Naturally there are a lot of different, often conflicting, opinions throughout. Quite hard to summarise briefly but will try:

 

-----------

 

It is proposed to the house that the belief is:

 

 

  • Consumers have a right to be treated fairly
  • Energy companies will meet their obligations and provide good services
  • Should a breach occur, decisive action should be taken to put things right and prevent further breaches

Since 2001, Ofgem has imposed at least 31 fines totalling at least £90 million. Despite this many energy companies face ongoing investigations.

 

Whilst the energy regulator has power to revoke a licence in limited circumstances, it is powerless to do so where an energy company complies with a penalty notice and then commit further seperate breaches of their licence (i.e. the slate is wiped clean).

 

Since 2010, average energy bills have risen by £300 (twice as fast as inflation, four times faster than wages).

 

Some argument as to whether or not these increases are due to green energy initiatives.

 

Noted that where wholesale costs rise, increases are quickly passed on to consumers. The reverse is not true.

 

Suggested that lengthy enquiries (sometimes even spanning 18 months) don't actually acheive anything and instead, consumer protection law should be implemented to speed up the process.

 

Argument that current financial penalties do not present enough of a deterrent to energy companies - merely "a cost of doing business". Also concerns that such fines eventually get passed on to the consumer anyway, in the form of higher prices.

 

Proposal put forward that the regulator is granted new powers to revoke energy company licences when repeated instances of serious and deliberate breaches of licence conditions occur, especially when they harm the interest of consumers.

 

Counter-argument that such a power is harmful to competition. If an energy company were to be closed down, how would those customers be redistributed to other suppliers?

 

Whilst the secratary of state acknowledges there are far too many cases where energy companies let customers down (citing mis-selling, poor complaints handling, poor billing, unacceptable treatment) and acknowledges this has been going on for many years - he believes that revocation of a licence is the nuclear option and is instead harmful to the consumer as well as the company.

 

The secratary of state believes the energy regulator already has the power it needs and that the right balance is currently attained.

 

Npower and British Gas (Centrica) are specifically mentioned throughout for providing terrible service to customers for many years.

 

Revealed that Npower, Scottish Power, E.ON and EDF energy refused to provide the full £50 reduction to customers on fixed price deals (result of government changes to green levies on energy bills announced December 2013). Although the government stated non-payment would be unacceptable, to date no action has been taken.

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The only way to sort out energy companies is for them to be run by the Government. That way we will get a fair deal, Parliament will get a lot of income and there will be no chance of being blackmailed by a foreign company which all the energy companies are.

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I fully support the renationalisation of strategic assets and utilities :)

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The SabreSheep, All information is offered on good faith and based on mine and others experiences. I am not a qualified legal professional and you should always seek legal advice if you are unsure of your position.

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I fully support the renationalisation of strategic assets and utilities :)

 

 

And me. No country should have Gas, Water and Electric run by private companies, especially water. They can keep to the same pay scale as at present and the boss get his huge salary ie run it as a commercial enterprise and still make millions for the country.

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