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from three of the ‘big six’ energy companies – Npower, Scottish Power and Scottish and Southern Energy – have been withdrawn for new customers in the past few weeks.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