Labour Claims Energy Firms Paid £4bn over Market Rate IBTimes UK

Britain's opposition has claimed that the UK's 'Big Six' energy companies paid £4bn more than the market price for power in 2013 which led to households paying £150 more on their gas and electricity bills.

According to the Labour party's analysis of official figures, the 'Big Six' is either "inflating their prices to make extra profits for their own power plants, or striking very expensive deals to the detriment of consumers."

"These figures reveal the full extent of the way consumers have been overcharged for their electricity," said shadow energy secretary Caroline Flint.

"Energy companies always blame wholesale costs when they put up bills, but it now looks like they could have deliberately inflated prices to boost profits from their power stations.

"The time has come for a complete overhaul of our energy market. Labour will break up the big energy companies, put an end to the secret deals and force them to do all of their trading on the open market."

Opposition leader Ed Miliband pledged to freeze energy prices until 2017 if the Labour Party wins the general election in two years.

Three months after this promise, the coalition government pledged to cut energy bills by £50 a year, via a raft of measures.

The 'Big Six' account for 99% of Britain's energy market and is comprised of SSE, E.on, EDF, npower, Scottish Power and British Gas.

Energy UK, which represents the 'Big Six', hit back and disputed Labour's figures and analysis.

"It also covers losses, the energy element of reconciliation-by-difference costs and balancing and shaping costs incurred by the supply," a spokesman said.

"The additional costs included in the weighted average cost of fuel make them a totally different figure to the basic wholesale market price.

"It is also worth pointing out there isn't a single 'wholesale' price. Different companies buy at different times, from different people, for different prices depending on demand, forecasts and a whole host of other factors.

"These different business practices mean each energy company will be paying a different amount for its wholesale energy."

The Labour party calculated its figures by comparing the price paid for electricity by the energy giants with the average market price a year ahead provided to them by small supplier First Utility.

Britain's biggest energy companies are already under close parliamentary scrutiny after they all unveiled eye watering price hikes.

The 'Big Six' energy company chiefs are also set to give evidence to British politicians over why it took so long to restore power to thousands of customers after the Christmas storm outages.

Energy Select Committee Chairman Tim Yeo says that the 'Big Six' energy groups, which account for 99% of the UK market, will have to answer for their "unacceptable performance".