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21 May 2008 - Power companies operating in the UK were accused of effectively rigging the market against customers said Energywatch, the official consumer body.
It said the big six power generators are on course to collect £6bn ($12bn) in what Energywatch chief executive Allan Asher described as unearned profits in the next few years.
The Commons Business and Enterprise Select Committee is holding an inquiry into rising energy prices. Mr Asher told MPs that he was alarmed that the power companies' profits are being fattened by tying the price of gas to spiralling oil prices, which have reached record levels recently.
Mr Asher believes this 'toxic' link means that annual bills for heat and light are £400 ($800) a year higher than they should be.
He said the UK market was 'stitched-up' with the result that prices in Britain are systematically rising much more quickly than in Europe. 'It makes a mockery of saying we have a competitive and healthy market,' he declared.
Over the last ten years, the number of energy firms in the UK has shrunk from 20 to six - British Gas, E.on, Npower, EDF, Scottish & Southern Energy and Scottish Power.
These companies not only sell heat and light but are also responsible for producing or importing 80 per cent of gas and electricity.
Mr Asher said this has created a 'comfortable oligopoly' with the result that there is a price gap of only £30 a year between the cheapest and most expensive firm based on a dual fuel contract.
Mr Asher said action was needed to encourage new firms to enter the UK market, both to build new generating stations or to sell to the public.
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