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divdiv class=story-body readability=61 span class=story-date#13; span class=date28 October 2013/span#13;span class=time-textLast updated at /spanspan class=time20:01 ET/span#13; #13;/span#13;#13; #13;#13;#13; #13; #13; #13; p class=introduction id=story_continues_1Top executives from the UK's six largest energy companies are expected to face serious criticism when they come before a group of MPs./p#13; pThe bosses have been called in front of the Energy and Climate Change Committee, following recent price rises./p#13; pSo far, four companies have announced increases that average 9.1%./p#13; pThe energy firms are expected to insist that the rises were largely due to increasing wholesale prices./p#13; pBut Andrew Wright, the acting chief executive of regulator Ofgem, is expected to tell the MPs that wholesale prices have risen by less than the rate of inflation./p#13; pOfgem data suggests that wholesale electricity and gas together have risen by just 1.7% over the last year./p#13; pIt estimates the net effect of wholesale prices on a household bill should be just £10 extra on a bill of £600./p#13; span class=cross-headFurther rises/span#13; div class=story-feature narrow#13; a class=hidden href=#story_continues_2Continue reading the main story/a h2 class=quote“spanStart Quote/span/h2#13;blockquote readability=2p class=first-childIf you look at the 24-month figure to October 2013, there has been an 18% rise in the wholesale cost”/p/blockquote#13;span class=endquoteEnd Quote/span#13; span class=quote-creditSpokesperson/span#13; span class=quote-credit-titleBritish Gas/span#13;#13; /div p id=story_continues_2However, the energy companies are expected to argue that wholesale prices have gone up much faster than Ofgem maintains./p#13; pMost companies try to reduce risk by buying wholesale gas on the futures market, a process known as hedging./p#13; pMany will buy up to two years in advance./p#13; pIf you look at the 24-month figure to October 2013, there has been an 18% rise in the wholesale cost, said a spokesperson for British Gas, the largest energy supplier./p#13; pScottish Power said that wholesale costs had jumped 7% in the last year./p#13; pBritish Gas was also critical of the way in which Ofgem calculates the increases./p#13; pThe prices that individual suppliers pay depend on their own hedging strategies, and the Ofgem methodology is, at best, an approximation of what those hedging profiles are, said the spokesperson./p#13; pHowever, Ofgem has admitted that wholesale prices are due to rise significantly this winter./p#13; #13; pIt expects the wholesale price of gas to rise 8%, and electricity to rise 13%, putting further pressure on bills./p#13; pUnder new Ofgem proposals, the big six energy companies will have to announce exactly how much they pay for wholesale gas or electricity, up to two years in advance./p#13; pThe companies have also blamed the rising cost of transmission, and green energy levies, for the recent price rises./p#13; span class=cross-headTransparency/span#13; pOn Monday, Prime Minister David Cameron stressed that he wanted to see further competition between suppliers./p#13; pI'm frustrated about the big six, he said. /p#13; pI want to see the big 60; I want to see many more energy companies./p#13; pA spokesman for Number 10 added that the energy companies needed to do more to justify price rises./p#13; pIt is for the energy companies to explain the decisions they have taken around bills to their customers, he said./p#13; pMPs on the Energy Committee will echo those sentiments, by asking companies to explain why consumers are now having to face an average dual-fuel bill of £1,320 a year./p#13; pThey also want to know how the transparency of their profits can be improved./p#13; pIn a letter to the committee, Ian Peters, the managing director of energy at British Gas, admitted that there was further work to do on that./p#13; pLater this week, the Energy Secretary, Ed Davey, is expected to set out further details of the annual competition test for the energy market./p#13; pThe review will be carried out by Ofgem in conjunction with the Office of Fair Trading (OFT) and the new Competition and Markets Authority (CMA)./p#13; pThe government has also said it will look at the contribution made to energy bills by the green levies, although these make up a relatively small part of overall costs./p#13; /div/divbrbrcentera href=http://www.wizardrss.comPowered By WizardRSS.com/a | a href=http://www.wizardrss.comFull Text RSS Feed/a | a href=http://www.amazon.com/RFID-Blocking-Cards-Identity-Protector/dp/B00CJHZLEWRFID/a | a href=http://www.wpzonbuilder.comAmazon Affiliate/a/center