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Power bills to soar AGAIN: Winter price shock looms for millions of households

 

One of Britain’s largest energy providers is preparing to raise prices during the depths of winter, it was feared last night.

German-owned E.ON, which provides power to 5million households across the UK, has pledged not to increase tariffs before December 31.

But consumer groups yesterday said they suspected the company was planning to introduce inflation-busting increases immediately after the deadline expires on January 1.

 

Feeling the chill: Gas price rises could hit the most vulnerable, including the elderly and poor

This would lock families into paying higher rates to heat their homes just as the coldest months of the year start to bite.

Industry insiders warn that it is inevitable that all of the major providers – British Gas, EDF, SSE, E.ON, Npower and Scottish Power – will increase prices either before or during winter.

This would leave almost every family in Britain facing higher tariffs at a time when household incomes are being squeezed by soaring food prices and savings are being eaten away by inflation.

 

A sharp and sudden rise in bills could push millions more into fuel poverty – where they face the nightmare choice between heating and eating – while more cash pours into the coffers of the energy companies.

The Big Six all faced criticism from consumer groups last autumn for raising tariffs and then dropping them again in the spring.

It now appears the same pattern could be repeated this year – further increasing suspicions that UK energy providers act as a cartel.

Next week Southern Electric owner SSE will increase rates by 9 per cent – the first company to raise tariffs as winter approaches.

British Gas has also warned it may have to increase bills by an average of £130 before winter – which would take the average family’s dual fuel bill to a record high of around £1,400.

 

Only last week a report from energy regulator Ofgem laid bare the UK’s desperate energy needs and said the country could face 1970s-style blackouts in three years.

Experts said household bills will double by 2015 because of the energy shortages which are being heaped on the UK because of green laws passed by the EU.

 

E.ON is currently the only firm which has promised not to increase rates during 2012 – a pledge it made in May to try and win over new customers.

But the group, which last year bumped up its prices by 11 per cent for electricity and 18 per cent for gas, has so far refused to extend the guarantee into 2013.

Consumer champion Martin Lewis, from Money Saving Expert, said he expected a rise early in January.

‘What usually happens, a very short time after the pledge ends, is the prices jump,’ he said.

He said he was willing to bet that the group would raise bills or announce an increase in January.

He said that price guarantees, such as the one offered by E.ON, ‘give customers a false sense of security, even more so if they encourage people to switch to a provider offering one’.

Mr Lewis added: ‘The promise is “no price hikes this year”. So technically, it could announce a hike in November to start on 1 January. January and February are the coldest months of the year, but the price promise does not extend to then.

‘Most people who switch stay with that provider for years, so the few months of price holds is of limited impact.’

 

Under industry regulations, energy companies need to give 30 days’ notice of price rises. This means the earliest another rise could come into force is November.

Mr Lewis called for every energy company to promise not to increase prices in the first six months of a customer contract.

E.ON boasts on the front page of its website: ‘We stand by our promise not to increase home energy prices in 2012’.

But a spokesman for the energy giant yesterday said: ‘Our price promise runs until the end of the year.

‘While we do everything we can to help our customers, we can’t guarantee that we will extend this.

‘We are not ruling anything in or out at the moment.’

*Source - Taken from Daily Mail online 09/10/2012

  • German-owned E.ON could be planning an inflation-busting hike during winter for its five million UK customers
  • Fears mount other energy providers could follow suit - confronting nearly every family with sharp rise
  • British Gas, EDF, SSE, E.ON, Npower and Scottish Power have all faced criticism for raising tariffs and then dropping them again in the spring
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