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Non-energy costs are adding pressure to domestic energy bills for 2015/16, according to Eon.
Eon UK chief executive Tony Cocker said in a letter to Ofgem on Wednesday that network charges, alongside environmental and social obligations were adding costs to consumer energy bills.
Last week, Ofgem chief executive Dermot Nolan, wrote to the major energy suppliers telling them to explain the impact falling wholesale prices have on their energy prices.
Responding to this letter, Cocker said wholesale costs are “not the only contributor” and that networks charges and government obligations represented a “significant pressure to domestic bills”.
The “ongoing uncertainty” surrounding the Energy Company Obligation (Eco) was also blamed for affecting energy bills because Eon could be “potentially exposed by the rules being changes half-way through the game,” having “tackled the work early”.
He added there is an “overhanging uncertainty around companies’ ability to recover any of their costs in this period”.
Cocker also wrote that hedging strategies over a “longer period” would determine the impact of falling wholesale prices on consumer bills.
He also responded to Ofgem’s concerns about communicating to consumers the impact wholesale prices have on energy bills.
Cocker said this was “not a straightforward issue” but acknowledged Eon, and the industry as a whole” “could do more”.
He invited Nolan to join industry and consumer representatives to discuss this information could be made “more accessible and understandable for consumers”.
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