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Labour leader Ed Miliband: "I'm not going to tolerate the energy companies using the fact there's going to be a price freeze to collude in raising prices"
Ed Miliband has insisted his plan to freeze gas and electricity bills will not lead to the lights going out - as suppliers stepped up their fight back.
The Labour leader made the promise on Tuesday - getting a rousing reception during his party conference speech.
But energy firms, business groups and coalition ministers have warned the plan could put future supplies at risk.
Shares in the two big energy firms listed in London - Centrica and SSE - fell by more than 5% on Wednesday.
The chief executive of another of the "big six", E.On responded to Mr Miliband's plans in a letter sent to BBC Radio 4's PM programme.
Energy profits
The "big six" - British Gas, EDF, E.On, npower, Scottish Power, SSE - made total net profits of:
2009: £2.15bn
2010: £2.22bn
2011: £3.87bn
2012: £3.74bn
Calling for "honesty" in the debate, Tony Cocker wrote: "Successive governments have collected taxes for different schemes through energy bills and this has added extra pressure and is a factor in why bills have risen over a sustained period of time.
"All politicians, from all sides, need to acknowledge that fact. At a stroke you could remove a large cost from energy bills simply by moving these costs to general taxation."
Earlier Mr Miliband had written to the big six suppliers warning that without changes, taxpayer-funded guarantees to energy firms might not be sustainable.
The plan for a freeze on household and business energy bills between June 2015 and the start of 2017 was the stand-out announcement of Mr Miliband's party conference speech on Tuesday.
Labour says the move will save average households £120 a year and businesses £1,800.
Rebutting claims that to protect their profits, suppliers would merely put their prices up ahead of Labour's freeze, Mr Miliband said he would "make sure this is a genuine freeze that works for consumers".
Cheaper energy bills
Advice from the Energy Saving Trust:
- Insulate your hot water cylinder. Could save up to £60 a year
- Get an eco-shower head. Some water companies are giving them away free; could save you up to £75 a year
- Swap halogen spot lights with new LED bulbs. Replacing all traditional bulbs with energy saving versions can save £60 a year
"If we have to take action to make sure that happens, we absolutely will."
Speaking at a fringe meeting on Tuesday evening, a senior British Gas executive suggested such a direct price intervention could "threaten energy security in the UK".
"If we have no ability to control what we did with the retail prices, and that (wholesale price volatility) was to happen again, it would mean we are selling products at significant amounts of a loss and that would threaten energy security in the UK," said Ian Peters.
Asked whether it could mean "the lights could go off" he replied: "I think that is a risk."
'Economic ruin'Energy UK, the trade body representing the six largest energy firms, has described the price freeze as "superficially attractive" but suggested it could bring a halt to future infrastructure projects.
Chief executive Angela Knight said: "It will also freeze the money to build and renew power stations, freeze the jobs and livelihoods of the 600,000-plus people dependent on the energy industry and make the prospect of energy shortages a reality, pushing up the prices for everyone."
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Centrica's boss warns that the plan could lead to firms' "economic ruin"
And the chairman of Centrica - British Gas's holding company - said a firm unable to control either its costs or its prices was potentially in danger of "economic ruin".
"We are all concerned about rising prices and the impact on consumers, but we also have a very real responsibility that we find supplies to make sure the lights stay on," Sir Roger Carr said.
Energy Secretary Ed Davey said: "Fixing prices in this way risks blackouts, jeopardises jobs and puts investment in clean, green technology in doubt.
"Ed Miliband made a significant contribution to tackling climate change with the 2008 Climate Change Act. But he is putting this all at risk with his ill thought through plan which will put off investors in low carbon power generation."
Asked on BBC Radio 4's Today programme whether a Labour government would step in if a firm went bust, Mr Miliband said: "That's not going to happen."
But he added: "Of course if there was a major shock, companies could make their case."
Energy regulator Ofgem, which Labour plans to replace after 2015, has suggested legislation would need to be passed to change pricing arrangements.
Source: BBC News - Business http://www.bbc.co.uk/news/uk-politics-24275114#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa
