E.ON and Scottish & Southern rise power prices by 30%

Two of Britain's energy providers have dramatically raised gas and electricity prices today, adding to the misery facing hard-pressed UK consumers and putting more people into fuel poverty.

Scottish & Southern Energy is putting an extra 29.2 per cent on gas customers' bills and 19.2 per cent on electricity bills, while more than four million customers of E.ON have been hit with energy price prices of up to 26 per cent.

Scottish & Southern, which will increase prices from next Monday, said the spike in the wholesale gas market yesterday demonstrated "the dramatic increase in wholesale energy prices we have experienced in the UK."

The group said customers on its duel-fuel contracts would on average pay £100 less at £1,259 this year than British Gas customers.

E.ON, the German-owned energy giant, said it had been forced to lift its prices for electricity by 16 per cent and gas by 26 per cent because of soaring wholesale energy prices, which it claimed had risen 51 per cent since February 1.

Graham Bartlett, managing director of E.ON’s retail business, said: “I’m very aware of the effect that today’s announcement will have on our customers and I recognise that this is a very tough time for everyone. 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."

The price move, which takes effect tomorrow, amounts to a 22 per cent rise for an average dual-fuel customer from £1,063 in July up to £1,297.

In total, customers have been hit with an increase of 42 per cent, or £384, since the beginning of the year when the average E.ON dual-fuel bill stood at £913.

The company has 5.5 million UK customers but one in four will be unaffected by the changes because they are on fixed tariffs or price-protection plans.

The latest increase is expected to raise an extra £930 million a year for E.ON whose price rise follows similar recent increases from EDF and British Gas.

E.ON said it was investing billions of pounds in new energy projects as well as £200 million in a gas storage scheme in Cheshire.

The company said this would allow it to store gas when prices are low in the summer for use when wholesale prices increase, thereby reducing price volatility.

The remaining two big UK energy suppliers, Scottish Power and N-Power, are expected to follow suit in the weeks ahead.

Gordon Lishman, director general of Age Concern, said: “These enormous price hikes will be a huge blow to millions of people already wondering just how they’re going to pay their bills this winter. We are extremely concerned that the one-in-three pensioner households likely to be living in fuel poverty by the end of the year will feel forced to cut back on essential food or fuel.”

He called on the Government to offer fuel vouchers to the poorest pensioners.

Maria Wardrobe of National Energy Action said the increase had pushed the number of households living in fuel poverty in the UK above 5 million for the first time since the late 1990s - representing around 19 per cent of households.

Fuel poverty is defined as having to spend 10 per cent or more of monthly income on energy.

“This is going to make the problem even worse,” she said, calling for the Government to boost its funding on energy efficiency programmes.

Source: Timesonline.co.uk