Gas and electricity prices may have to rise further, warns industry body

Britain’s big six energy suppliers are under pressure to pass on more price hikes to  energy bills, the industry trade body has warned.

Npower, EDF and Scottish Power have already announced price rises for millions of customers, blaming a mix of rising wholesale costs, installation of smart meters and government policies paid for through bills. British Gas has frozen prices until August, while SSE and E.ON have yet to declare their intentions.

The chief executive of Energy UK, which represents most of the 40-plus energy suppliers, told MPs on Wednesday that the rises were justified.

5200

Scottish Power customers to expect 7.8% price hike

“It is plain that we have seen increases in wholesale prices over the last 12 months or so, and we can see going out into the future there are continuing pressures there,” said Lawrence Slade. He said month-ahead wholesale gas prices for March were 100% higher than last year, and electricity was up 69%.

In addition, the cost of government policies, such as subsidies added to bills to support renewable power, “should not be underplayed”, he said. Such costs would make up £120 to £140 of the average annual household energy bill next year, Energy UK said.

Slade refused to say whether he thought Npower’s recent electricity price increase of 15% was acceptable and said he had no knowledge of individual companies’ future pricing plans.

But the head of the energy regulator, Ofgem, dismissed the idea that government policies or smart meters were adding significantly to suppliers’ costs, and said increasing fossil fuel prices were the main pressure.

Article Source: The Guardian 22/02/17