In the last few weeks, four of the big six energy providers, British Gas, npower, Scottish Power and SSE have announced price rises. And now EDF is the fifth one of these ‘big six’ providers to announce a price rise, and at almost 11%, this is the biggest rise of all the six firms. So should you be thinking about switching your supplier? Well, hold on a second, because despite EDF imposing the largest price rise, their new tariffs are supposedly still cheaper than those of all the other major suppliers.
EDF Energy currently supply electricity and gas to around 3 million customers and say that the average 10.8% increase will come into effect on 7th December, just in time for Christmas. It also comes at the end of the Big Energy Saving Week, a national initiative designed to educate people about how to cut energy bills. However, this 10.8% increase is an average as regional variations in energy prices and different methods of payment mean customers will experience different increases. The lowest rise increase is 6.9% for the Economy 7 (south Scotland), while the highest is 14.2% (north Wales) for the same payment type.
As usual EDF is blaming the increase on a combination of “significant extra costs in the use of gas and electricity networks, mandatory energy efficiency and social schemes, plus the rising price of wholesale energy.” Martin Lawrence, who is the Managing Director of Energy Sourcing and Customer Supply says: “We know customers will not welcome this news and do not want to see prices going up,” he added: “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.”
The other big six energy companies have also announced big prices increases with Scottish Power raising its prices by up to 8.7%, npower increasing theirs by 9% and British Gas raising theirs by 6%. SSE put up its prices by 9% back in August. Of these big six companies, only E.ON has not yet increased their prices, although it is expected to do so in due course. However, the company has promised a price freeze until 2013 so any changes wouldn’t happen until then.
Ann Robinson, director of consumer policy at uSwitch.com, said the price rise is “the final hammer blow” for energy customers this side of Christmas. Consumers now face a winter of rationing their energy usage – many will be forced to turn their heating down or off for fear of the impact of these hikes,” she said. And Clare Francis, consumer finance expert at moneysupermarket.com, said: “Customers need to keep on their toes to try and beat rising bills. The longer, colder nights are drawing in, encouraging people to crank up the thermostat. Any customers languishing on their provider’s standard tariff should act now to ensure they switch on to the best deal.”
Downing Street described the latest price rises as ‘very disappointing’. A Number 10 spokeswoman said: “It is up to energy suppliers to explain their prices to their customers. While we can’t control world energy prices, we have been working very closely with the energy companies to make it easier for people to switch to find cheaper deals. We want to ensure customers get the lowest tariffs. That is why we are going to use the law to help people get the best deals.”
In fact, in Prime Ministers questions last week, many people thought that David Cameron had shot himself in the foot as he suggested that the government was putting together legislation to ensure that energy companies were offering their customers the lowest tariff available, something that goes against Tory policy and their ideology of allowing a free market and competition. As to whether you should switch suppliers or not, the general consensus is that you should look for a supplier with a low tariff that will fix your rate, and if prices fall allow you to pay the lower rate. Currently British Gas are offering this deal with their Fix & Fall tariff.