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Wednesday
27th August 2008
Four of the "big six" energy companies have now raised their prices for a
second time since the start of the year.
Both firms blame soaring wholesale electricity and gas prices for the
increase in rates, as did British Gas and EDF Energy when their announced their
price increases in recent weeks.
E.ON raised their gas prices by 26 per cent and electricity prices by 16 per
cent for its 5.5 million customers last week, whereas Scottish & Southern Energy
have hiked gas prices by 29.2 per cent and electricity bills by 19.2 per cent.
 These
gas price rises follow EDF's increase of 22 per
cent and British Gas's rise of 35 per cent - the
largest ever increase in rates by a utility provider in the UK.
Npower and ScottishPower are the only major energy companies no to have
raised their prices this summer, but are expected to announce similar price
increases soon.
SSE, which owns Southern Electric, Swalec and Scottish Hydro Electric, cited
a jump in forward wholesale prices of 50 per cent for electricity and 60 per
cent for gas between February and July as the main driver for the price changes.
Wholesale prices have soared since the start of the year, due to the sharp
increase in the price of oil, and Britain's increased reliance on imported gas
from Europe.
SSE's energy supply director Alistair Phillips-Davies said: "The world is
experiencing an energy shock of a kind not seen since the early 1970s, but which
is likely to have more profound and lasting consequences."
"The country now relies on energy imports and the prices we all pay for
electricity and
gas are ultimately determined by
the law of supply and demand in a global economy," he said.
The firm added that the increases would have been even higher but for the
fact wholesale prices had fallen slightly in recent weeks - although more
vulnerable customers would not face higher bills until at least the end of the
winter period.
E.ON is the UK arm of the German energy group that bought Powergen has said
that over than a quarter of its customers are unaffected by the recent rises, as
they were on special tariffs or
fixed price energy contracts.
Most businesses are not immediately affected, as they should be in fixed
price contracts, but any company that hasn't agreed a deal with a supplier will
be paying the supplier's "deemed rates", and is subject to price increases at
little or no notice. Companies that have agreed
business energy contracts
with a supplier will not be subject to rises until their current contract
expires, and will then usually get a renewal offer from the supplier at much
increased rates.
E.ON's managing director Graham Bartlett said: "This was not an easy decision
to make and we've tried to keep these increases as low as possible while
protecting as many of our customers as we can."
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