Millions of Homes Face Hikes in Fuel Costs
Homes Face Hikes in Fuel Costs – Over a million Londoners have been hit with a massive rise in gas and electricity prices.
Homes Face Hikes in Fuel Costs – Deemed as the capital’s largest energy supplier EDF will push average household bills up by around £120 to £125 per annum affecting 3 million customers
Eight months ago EDF announced operating profits had risen by 8.5 % in a year to £1.6 billion – approximately £50 per second. Last year they gave £1.87 billion in dividends to shareholders.
EDF is the fifth of the ‘big six’ energy firms to raise tariffs in the last few weeks. The sixth, E.ON, is expected to follow suit in January.
The companies have blamed Government policies for the rise in prices, including requirements to pay for a switch to green and nuclear energy, and funding the insulation of cold homes.
Earlier this month, David Cameron told suppliers he intends to bring in legislation forcing them to offer customers the cheapest tariff.
Currently, 75 per cent of households are on their supplier’s most expensive scheme, with 60 per cent admitting to having never switched firms in the past 15 years.
Downing Street yesterday confirmed the law will be changed to force firms to charge a fair price.
Audrey Gallacher, energy expert at customer group Consumer Focus, said: ‘Another price rise, hot on the heels of those we’ve already seen, will again feed into consumer concerns on pack behaviour and whether price changes are driven by real supply and demand issues.’
EDF's 10.8 per cent hike, which will affect three million customers from December 7, is due to rising cost of distribution, efficiency, buying energy and wholesale prices.
EDF director Martin Lawrence said: ‘We know that customers will not welcome this news and do not want to see prices going up.
‘Our new prices will however be cheaper on average than those of all the other major suppliers which have announced standard price rises so far this autumn.'
Mr Lawrence also added that it is the first supplier to automatically switch vulnerable customers, for example those receiving pension credits, to its cheapest tariff, benefitting 85,000 customers.
A nine per cent rise from Scottish and Southern Energy (SSE) started earlier this month, while price increases from Scottish Power, British Gas and nPower will hit customer bills before the end of the year.
The EDF hike is the biggest percentage rise, so far, this year – however, a spokesman said that its average price is still cheapest average tariff, even after the increase.
It brings an EDF annual duel fuel direct debit bill to an average of £1,251, just £7 cheaper than its nearest rival nPower which will charge customers £1,258 annually, after its rise.
Audrey Gallacher, from Consumer Focus, said: ‘The latest energy price rise will leave even more customers worried about their energy bills.
‘EDF Energy’s tariffs will still be slightly cheaper on average than other suppliers who have increased their prices – but this will be little comfort to those seeing a double-digit percentage rise on their bills.'
The news will come as a blow to millions of households who have little escape from energy price rises this winter just as the cold weather hits.
Ann Robinson, from uSwitch.com, said: ‘This is the final hammer blow for energy bills this side of Christmas. Consumers now face a winter of rationing their energy usage – many will be forced to turned their heating down or off for fear of the impact of these hikes.
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