EDF, one of Britain's 'big six' energy companies, has caused a stir by announcing a much smaller price hike than its rivals.
The firm announced a winter rise of 3.9% in gas and electricity prices, which will add around £50 a year to the average household bill.
The large energy companies have announced autumn price rises over recent weeks, leading politicians to question the competitiveness of the energy market.
Four of the 'big six' – British Gas, nPower, Scottish Power and SSE – have announced price increases between 8.2% and 10.4% which will come into effect during the autumn. E.On is expected to announce a 6.6% increase for the New Year in due course.
Companies have blamed rising wholesale prices and higher distribution costs for the price hikes. But EDF said it was “holding back rising costs” to limit rises for customers.
Though any rises are challenging for customers, the firm said, its restrained price rises would keep prices much cheaper than its major rivals.
“I know that price rises are always unwelcome, but we have taken the first step to show what can be done if rising costs are tackled head-on,” said EDF’s chief executive, Vincent de Rivaz.
New Energy Switching System
The latest round of increases has brought an angry response from consumer groups and politicians, and has raised calls for an improved switching system that would allow consumers to switch from their current supplier with greater ease.
It can currently take up to six weeks for customers to transfer from one energy supplier to another, which has deterred consumers from switching and cultivated a lack of competition between big suppliers.
But energy secretary Ed Davey has cited the new current account switching system as a model that the energy industry must follow.
The new £750 million system processes far more complicated data than that transferred between energy companies within seven days. Therefore, commentators have argued, energy companies should be able to cut the time required to transfer accounts down to just one day.
Mr Davey is set to continue his attack today at a conference arranged by Energy UK, where energy companies will be asked to be more transparent and show how they can do more to keep bills down for hard-pressed consumers.
At Which4U, we’re looking at different energy-saving techniques to help consumers protect themselves from the impact of higher energy bills. Have you considered LED lighting, for example, which uses up to 80% less electricity than standard bulbs? Check out our blog for more money-saving tips.
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