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Could you be hit with higher energy bills?

Gas hob flame

Uh oh. Despite it being one of the few months we don’t need to reach for the thermostat, the energy increase ‘will they/won’t they’ rumour mill has been stirring into life again.

What with some cheaper energy deals doing a disappearing act, and reports of some EDF Energy customers getting automatically nudged on to a more expensive tariff, things aren’t looking pretty out there.

Following some long-awaited price decreases earlier this year, things started looking shaky again at the end of April. Ovo Energy – a new company who had helped to stir prices up a bit – upped the cost of its New Energy fixed online tariff by 8% for new customers.

Energy companies tinkering with tariffs

Now, sadly, it looks like some of the bigger energy players are ‘tinkering’ with their offerings too.

According to MoneySupermarket, cheaper online deals from three of the ‘big six’ energy companies – Npower, Scottish Power and Scottish and Southern Energy – have been withdrawn for new customers in the past few weeks.

EDF Energy, meanwhile, is shifting thousands of customers currently on a fixed online deal ending on 31 July straight to its ‘competitively priced’ (yet more expensive) standard deal.

Wholesale gas prices increasing too

And now something else has entered the ring to help muddy the energy pricing waters: talk of ‘wholesale gas prices’ going up.

One economic group, Nera, has suggested that prices on the UK wholesale gas market (the price energy companies pay for the energy they sell to us) have increased by 32% over the last seven months.

Confused? You’re not alone. Our research showed nine in 10 people want greater transparency around the calculation of energy prices. Decoding the claimed link between wholesale and domestic energy prices is pretty confusing and it’s something we’re campaigning to change here at Which?

How to beat an energy price rise

Which? energy policy expert Dr Fiona Cochrane offers this advice:

  • If your prices have gone up or you’re coming to the end of a fixed price deal, don’t panic. You have 20 working days to change your tariff to the cheapest one available – and companies can’t back-charge you.
  • As a general rule, if you don’t pay by direct debit and aren’t on an online tariff, there’s probably a cheaper option out there for you.
  • Use an accredited energy comparison service to find out what your options are – but check the T&Cs for what happens when limited introductory rates or fixed-term tariffs come to an end.
Comments
Guest
Tony says:
26 July 2010

Is this item only about gas, as suggested by the illustration? We can’t get gas and have banished oil, so depend on electricity – and ‘clean’ fuel in its delivery, at least – so we’re all for nuclear (the most effiecient) form of production.

Guest

Hi Tony – I think the debate really extends to both gas and electricity, particularly because wholesale electricity prices are on the rise along with gas. That image was used to represent ‘energy’ more widely. Sorry if it caused any confusion!

Guest
Keith Goldthorpe says:
26 July 2010

Try ground source heat pump or even air sourced heatpump. KJG

Guest
Peter Langdon says:
26 July 2010

Little wonder that our utilities bills such as gas and electricity are always rising when these companies are all foreign owned. We are paying for the companies home country customers to benefit from lower tariffs. When will this country stop selling our British companies to foreign buyers. If I am correct the French and Spanish governments have banned such transactions

Guest

Oh come on! You can hardly blame our French and Spanish cousins for that one. Just because they’re foreign-owned doesn’t mean they’re pinching all our pennies!

It doesn’t matter who owns them – if we can’t run them properly then let someone else do it. If that doesn’t work then regulate them, but don’t go getting all xenophobic about it.

Guest

The energy companies are walking all over the regulator who seems to be either totally ineffectual or in their pay. Perhaps this is another Quango that should get the chop. Given their record since privatisation the government should consider re-nationalisation of the utilities, without compensation.

Guest

Some time ago I switched Electricity supplier to Ecotricity, primarily because Ecotricity invest 100% of their profit into building renewable sources of supply (e.g. wind farms). A little to my surprise they turned out to be cheaper than many of their competitors, but most significantly they have just two rates (three if you have Economy 7) and it’s very easy indeed to see what they are. By default they put you onto the cheaper rate too. Earlier this year they started to supply Gas so for the same ethical reasons I switched to them for Gas and I am pleased to say that there is just one rate, a Dual-Fuel discount and again a surprising but welcome benefit over some of the big companies. They are not the cheapest there is, but I’m willing to bet they offer the clearest and easiest to understand tariffs.
Aside from that I completely agree with ray stone (above) that the regulator is either utterly useless or in the pay of the companies and should be closed down. I also agree that re-nationalisation would be welcome, though I am doubtful as to how much that would benefit us, the consumers.
One other area of interest for me, but not directly what this thread is about, is the excess fuel consumption of many so-called energy saving appliances. Which? legal team helped me to prove that one appliance (washer) which was Energy Saving Trust recommended actually used about 4 times as much energy as a 23 year old washer it replaced. My plumber and several Radio 4 "Money Box" programmes have pointed out that despite claims to the contrary many new boilers gobble gas in a similar way and via Radio 4’s "You and Yours" modern TV’s were also exposed to use over twice as much electricity as 10 to 30 year old models. Perhaps the manufacturers are also i"helping" the energy companies in some way?

Guest

Some interesting reaction to British Gas’ profit announcement today, nicely summed up here: http://www.guardian.co.uk/money/2010/jul/28/switching-tariff-reduce-energy-bills

Here’s what Which? chief executive, Peter Vicary-Smith, had to say:
‘This news will only fuel the belief that the likes of British Gas are ripping us off. On the one hand you have energy suppliers blaming high prices on the wholesale market and on the other you have British Gas announcing a massive increase in profits. For a consumer faced with a huge energy bill the two things just don’t seem to add up. Energy suppliers need to get a lot better at explaining how costs are passed on to customers to convince them that prices are fair.’

Guest
Michael Whitehouse says:
3 August 2010

I recently investigated switching to n-power for both electricity & gas . Their charges turned out to be higher than their canvasser had led me to believe , and not evened out over the year when paying by Direct Debit [which is important to me as a pensioner on a fixed income] . I got a better deal from Scottish Power than they had previously offered me , saving over £200 annually .
It’s far too difficult to [1] compare energy companies’ tariffs & [2] to switch energy suppliers without receiving letters and ‘phone-calls pressurising one , which is stressful !

Guest
a.anderson says:
3 August 2010

amusing to read comments like " fairer to the consumer " realise that does not even enter the equation !!!! Our only "voice" is the government,they should be the champions of the consumers, by keeping the banks, the energy giants,to mention only two,in some sort of " fair play "level instead they ( whichever government ) are standing back and watching us getting raped . They seem to have no teeth, even guts when fighting for us. Then,when ,like with the banks,the moguls hit trouble ,our money is taken to bail them out, no question, just taken !!! We are being taken for mugs, and,sadly, that is exactly what we are !!!! as they say in t.v`s eggheads can anyone stop them ? as long as we put up with it NO

Guest
George Jones says:
3 August 2010

My wife was accosted by an energy salesman in a store and told that our current supplier was the dearest on the market. We then checked the situation with Uswitch and found that our existing supplier was actually the cheapest on the market but with a different tariff from the one we were one. So I called them and arranged to switch to the cheaper tariff. A few days later I checked our account on line and it showed that we were still on the older dearer tariff so I called again. I was then told that this new cheaper tariff was only open to new customers.

This now seems to be a cynical new practice for big companies and I think it should be illegal to offer different tariffs to new customers. Does anyone agree with me?

Guest
Toneboy says:
20 August 2010

We recently had our dual fuel statement which said we had a credit for both gas and electric of £250 each.

It then went on to say based on our usage they expected us to run up fuel bills with a combined total in the region of £3500-£4000 for 2011, which a staggering amount for a three bedroom bungalow occupied by two people. I suppose this is some computer generated letter, which like us has great difficulty understanding the fuel bill let alone the charging structure.

Privatizing the energy market and the water market has certainly not delivered any real benefits to us the consumer, not that can easily be recognized.

Guest

Has anyone any comments about “air heat pumps”. I had a conversation with an energy advisor today and he suggests this is the way forward for many such as myself who are rural dwellers and have to rely on oil or solid fuel.

Guest

I like others have thought of switching to another energy supplier, whats stopping me is the fact that am I going to save any money over 12 months? At present i am with Npowers online dual tarriff. I was originally with Eon and switched 2years ago. Over the 2 years the monthly direct debit hasn’t increased that much overall

Guest
LPS Dave says:
24 August 2010

Yarrum – I believe that Air Source Heat Pumps are JUST becoming affordable in the respect that they are only now getting to a price where you might reasonably save enough in fuel bill s over the life of the pump to cover the purchase and installation cost of the pump to start with.
I think the best advice I can give you on this one is to shop around EXTENSIVELY before buying: I have Solar Water Heating and I paid slightly under £3,000 for all the equipment and the installation work. including a new factory lagged twin coil cylinder. But it took me almost 9 months of research to get a decent price: many companies want you to pay anything up to £15,000 and even some of the most expensive deals do NOT include a new cylinder but instead circulate the actual water that you will wash in through the panels, which in a worst case badly installed scenario might actually cool down water that was already hot.

In the same way I think that if you do really extensive research and price comparison for the Heat Pumps you can probably get a good deal but if you dive in too quickly you might well pay over the odds.

Good luck!