Yahoo Finance Energy Prices: Customers 'Not Cash Cows'
Ed Davey has been accused of dishing out "tit for tat Punch and Judy insults" by the energy industry after comparing them to bankers who caused the financial crisis.
The Energy Secretary used a speech to the Energy UK conference to tell the energy firms that they had hit their Fred the Shred moment, referring to Fred Goodwin the CEO who presided over the collapse of RBS (LSE: RBS.L - news) .
He warned the companies that customers were not "cash cows to be squeezed in the pursuit of a higher return for shareholders".
He said: "Trust between those who supply energy and those who use it is breaking down. It is so difficult for people to work out what exactly they are paying for that they fear the big energy companies are taking them for a ride when bills go up."
Energy UK responded saying: "The energy industry is already working hard to ensure everyone can keep the lights on and stay warm this winter. The best way to do this is for everyone to work together which is why this tit for tat Punch and Judy show of insults is so unproductive.
"The energy industry is vital to the UK. It is a major employer, a serious investor and a significant taxpayer.
"As analysis form UBS (Xetra: UB0BL6 - news) shows about 95 per cent of rising energy costs are out of the hands of the energy companies and can be attributed to government policies and other network, social and environmental costs."
The war of words came as EDF (Paris: FR0010242511 - news) became the fifth of the big six energy firms to announce an increase to its prices.
However, the 3.9% rise it announced was significantly lower than that of the other four firms, who have announced average price rises of 9.1%.
EDF said it would was not passing on the rising cost of the Government's green schemes, which it claims would have added an extra £50 to the average household bill.
The move will put pressure on David Cameron to come good on his pledge to roll back green energy levies - the charges on a customer's bill used to pay for environmentally friendly energy production schemes.
Mr Davey welcomed the announcement telling Sky News: "EDF has thrown down the competition gauntlet and I think that’s good to help people get better deals on their energy prices."
However, also speaking on Sky News Caroline Flint, the shadow energy secretary, pointed out: “What EDF have said today is that they will only increase their prices to the amount they have announced today if the Government gets rid of its obligations to support people with insulation and also renewables.
“They bring into question the way in which their five other compatriots within the big six have been using wholesale prices to justify price increases.”
The sixth energy firm, E.ON, is reportedly poised to increase its prices by 6.6%.
The row over energy prices escalated as an industry analyst warned that gas prices could soar this winter if the national supply runs short during another cold snap
Peter Hughes told Sky News that a "perfect storm" last March of extreme weather and the shutdown of two major pipelines caused prices to double.
He added that could happen again because the Government has refused to support the storage of more gas.
Sky's Nick Martin, on a gas platform in the North Sea, said: "North Sea gas won't last forever, the harder-to-reach wells cost tens of millions of pounds to drill.
"Somewhere in the middle of this complex equation, the customer still expects value for money."
:: Watch a day of special coverage on energy costs all day on Sky News - on Sky 501, Virgin Media 602, Freesat 202, Freeview 82, Skynews.com and Sky News for iPad.
There will also be a special programme on the energy industry on Jeff Randall Live this evening at 7pm.
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