ELECTRICITY consumers in Wales are paying up to £25 more a year for energy than their counterparts across Britain, Consumer Focus Wales has found.
A new report for the consumer champion has found consumers in south Wales pay on average £25 more a year for electricity than those across the rest of Britain, whilst customers in north Wales pay £13 more.
The report, which will be presented to the Assembly’s cross-party group on fuel poverty, found that the main reason for the difference is the cost of electricity distribution in areas with a low population[1]. It costs £20 a year more to distribute electricity in north Wales than the rest of Britain and £25 a year more in south Wales.
The condition of the distribution network and the cost of maintaining and improving it is also a factor.
Ceri Williams, energy policy advocate for Consumer Focus Wales, said: “It will be of concern to Welsh consumers that they are paying more for their electricity than consumers elsewhere. We will be raising our concerns about price differences with Ofgem, the energy regulator.
“Because of these higher costs, it is important for consumers to make sure they are getting the best deal from their energy supplier.”
The average price difference between Wales and the rest of Britain has fallen since 2008, when consumers in south Wales paid £35 more and those in north Wales an extra £16. However, during this time the average electricity bill has risen from £388 in 2008 to £461 today, which is a 19 per cent rise[2]. This is despite the fact the cost of wholesale energy to suppliers has fallen by half in the same period.
The decrease in average price difference between Wales and the rest of Britain is partly as the result of Swalec’s decision to lower its prices in south Wales. This followed concerns voiced in Ofgem’s 2008 Probe that suppliers were over-charging customers in areas where they were the local supplier until 1999, when consumers were first able to switch.
Consumer Focus Wales’ report also reveals the elements which make up the average £461 Welsh fuel bill. The cost of wholesale energy to the supplier and their profits are the largest element, at 48 per cent of the bill or £206 a year.
Notes:
Consumer Focus Wales presented the findings to the Assembly’s cross-party group on fuel poverty on June 9. Copies are available on our website
[1] Distribution is the process of delivering electricity from the very high voltage transmission systems to the customer, by using the local wires, transformers and substations of the regional distribution network. (ENA)
[2] Consumer Focus