Winter of power bills discontent on the way
as wholesale gas price rises 30%
By SEAN POULTER
Last updated at 11:57 AM on 23rd June 2011
Families have been warned of new energy bill hikes after watchdogs said wholesale gas prices for next winter will be 30 per cent higher.
Scottish Power recently announced a 19 per cent increase in gas tariffs and a 10 per cent jump in electricity, adding around £185 to an annual dual fuel bill.
Figures published yesterday make clear that other major players will follow suit.
Gloomy: Families have been warned of energy bill hikes after watchdogs said wholesale gas prices for next winter will be 30 per cent higher
The industry regulator, Ofgem, said the wholesale price of gas for delivery during the coming winter is running at more than 70p a therm, which is up by around 30 per cent on the 55p figure for the comparable period last year.
It comes against a background of suspicions that the UK’s ‘big six’ energy suppliers are guilty of profiteering.
Ofgem said it would press ahead with an investigation into the industry’s prices and profits.
It is to send in a team of accountants to examine the books of British Gas and its parent company Centrica, Scottish & Southern Energy, EDF, Scottish Power, E.on and nPower.
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Separately, the regulator is demanding that the firms slim down their complex array of more than 300 tariffs.
Concern: Ofgem's Alistair Buchanan hit out at suppliers
It also wants them to be required to sell off 20 per cent of the power they generate to third party firms, such as supermarkets like the Co-op, allowing them to enter the market. Alistair Buchanan, Ofgem’s chief executive, said: 'Energy suppliers have to transform the way they deal with consumers.'
Richard Lloyd, executive director of consumer group Which?, welcomed the investigation, saying: 'The big six energy companies have failed to prove that price increases are fair, so we support Ofgem’s efforts to scrutinise price hikes.
'Reform can’t come soon enough for people already struggling with their energy bills.'
Several of the big six are under investigation. Ofgem said yesterday that it is looking into the way Scottish Power announced its most recent price hike and whether it misled customers.
Scottish Power, owned by Iberdrola of Spain, is also under investigation over pricing plans and, along with three others, the potential mis-selling of energy.
Christine McGourty, director of energy firm trade body Energy UK, insisted prices in the UK are relatively low.