Electricity costs rise by 10%, Gas by 19%!!

Families suffer as energy bills soar yet again

AN energy giant has been blasted for hitting customers with a “body blow” hike in their energy bills, with consumer groups warning the company’s higher than expected increase in prices has opened the floodgates for rival suppliers to follow suit.

ScottishPower, which supplies around 750,000 households in Scotland, announced yesterday its domestic electricity bills would rise by an average of 10% from August 1, while the cost of domestic gas will go up by almost a fifth (19%) from the same date.

The announcement surpassed even worst-case scenarios from the Bank of England, which predicted recently that fuel bills could rise “by as much as” 15% by the end of the year.

It is the second time in seven months the company has introduced price rises, with gas bills going up by 2% in November and electricity by almost 9%.

The latest hikes mean that, by August, the average ScottishPower customer will have seen their annual bill inflate by £239 in 12 months.

ScottishPower blamed the most recent price rise on a prolonged increase in wholesale energy costs, which has pushed the average price of wholesale energy up 30% since November.

Pressure had also come from the cost of meeting Government environmental and social programmes and distributing electricity on the national grid, the company said.

ScottishPower’s UK retail director Raymond Jack said the company had done “what we can to absorb these additional costs for as long as possible to minimise the impact on our customers”.

However, there was widespread criticism from politicians and consumer groups, with the UK’s Secretary of State for Energy and Climate Change, Chris Huhne, saying it underlined the need to “get off the oil price hook” on to renewables.

SNP Energy spokesman Mike Weir called on UK ministers to intervene.

“People just cannot keep absorbing continuous and colossal energy price increases like this and the UK Government must step in,” he said.

“Soaring prices are particularly hard to swallow when Scotland is such an energy-rich country, yet faces steep rises in prices.

“We must have a top level review of the domestic and international energy market.

“UK Ministers need to take action to help long suffering domestic customers, as well as businesses which are being crushed under the weight of these additional costs.”

Scottish Labour leader Iain Gray said the increase would “hammer Scottish families and hit the elderly in particular”, while LibDem spokesman Liam McArthur MSP predicted a “domino effect” of announcements from the industry.

A spokeswoman for uSwitch said both British Gas and Scottish and Southern Energy had already hinted price increases could be on the horizon.

Ann Robinson, director of consumer policy at uSwitch.com, said: “We are in real danger of seeing a repeat of 2008 when energy bills rocketed by £334 or 41% as a result of consecutive rounds of price hikes.”

Marieke Dwarshuis, director at Consumer Focus Scotland, said: “This huge increase will be a body blow for consumers and we fear other firms will follow ScottishPower’s lead.

“Companies have been softening up customers for price rises for months but they will shocked at the scale of this rise.

“We know suppliers like the comfort of the pack and that price rises come in waves. Every household in the country will now be bracing themselves for impact.”

Gordon MacRae, head of communications and policy at Shelter Scotland, lambasted it as an “all-out assault” on household finances.

He said: “Prices cannot keep going up. Something’s got to give – either the short-term profit margins of utility companies or, for families, the choice of heating or eating. We fear more families will not be able to pay their bills and eventually lose the fight to keep a roof over their heads.”

Yesterday’s announcement comes weeks after regulator, Ofgem, called for the industry to be overhauled when it found the “big six” companies had put up prices more quickly than they reduced them when costs fell.

It accused them of “failing to play it straight” with consumers and threatened to refer them to the Competition Commission if they failed to simplify prices and sell off between 10% and 20% of their electricity output to allow smaller firms to enter the market.

Source: http://www.heraldscotland.com/news/home-news/families-suffer-as-energy-bills-soar-yet-again-1.1105707