Energy Price Watch news timeline
British Gas simplify tariffs... by cutting cheapest deal
EARLIER this year Ofgem complained that gas and electricity providers were filling the market with energy tariffs without adding value to consumers.
Adding more and more deals was just making it impossible for consumers to compare energy tariffs, Ofgem said. Unless providers started to shape up, it concluded, action would have to be taken.
We're not sure, however, that British Gas' decision to 'simplify' their energy tariff line up by simply cutting out the cheapest deal altogether was quite what they had in mind.
Websaver deal cut
The Websaver 3 tariff was British Gas' cheapest online only offering and, therefore, their cheapest offering overall.
Now there is only one online saver tariff, available with or without the provider's energy monitoring technology (EnergySaver).
As usual, British Gas also retain their Standard tariff as well as a fixed and Pay As You Go deal.
More price hikes
These changes could be construed as more subtle price hikes on top of the increase in actual energy rates that we've seen from all the energy providers this year.
Scottish Power, for example, also changed their cheapest fixed tariff recently.
Online Fixed Price April 2013 replaced a deal with rates fixed until just January of the same year but, analysts point out, the new deal is, on average, £75 more expensive than its predecessor.
Which? magazine have also been pointing out how slight differences in the way tariffs are advertised can make a big difference to consumers this week.
The consumer rights giant looked at price jumps consumers faced when they paid for their annual dual fuel tariffs with the big six energy companies by cheque rather than with cash.
Those without direct debit discounts paid £98.60 more over the course of a year, they found.
"While it may suit the energy suppliers to manage direct debit accounts, many people still prefer more traditional methods or simply have no choice in their circumstances," said Which? researcher, Alex Kouzarides.
100,000 leave British Gas
Around 100,000 British Gas customers have left the energy provider since the start of the year.
Now that the absence of some of the cheapest energy deals has sent the supplier's offers falling down the best buy tables there seems less chance than ever that those fleeing customers will be replaced.
A combination of customer loss and the warmer weather has led British Gas owner Centrica to issue a profit warning to shareholders.
Average household gas use is down by 17% year-on-year, as people put off turning their heating on for Winter, Centrica said.
Electricity use is down by 3% compared to the same period last year.
E.ON's two months free offer: energy fit or feeble?
E.ON are promising those taking its new Energy Fit tariff two months free from fuel bills.
It sounds promising for an energy sector which rarely seems to truly create innovative deals - but is it really worthwhile?
Energy Fit: how it works
To get Energy Fit E.ON customers have to sign up for dual fuel for two years and pay monthly by direct debit.
They get their 'free' months one year into the deal, month 12, and then just before they leave, month 24.
The free month is calculated as 1/12th of the annual energy bill so it's not an incentive to leave all the lights on and whack up the heating for one month of the year.
For example, the average annual energy charge of £1,150 would mean £95 waived.
As well as the two months free offer, Energy Fit customers will be encouraged to increase their household's energy efficiency.
They'll get a free energy usage monitor including software which can track exactly how energy is being used throughout a household and customers must fill out a survey to determine whether they could make further efficiency improvements to their homes.
Energy Fit: small print
The concept is, at least, original and the free energy efficiency technology is a welcome extra.
In fact, being more energy efficient could easily save consumers more than their 'free' months.
That's because if you look a little deeper into the small print on price, and you'll notice something a bit more worrying.
E.ON Energy Fit customers won't get the 8% dual fuel direct debit discount other E.ON customers can pick up.
"Each free month's worth of energy is funded in part by the non-payment of this discount," E.ON cheerily admit.
In free months, Energy Fit customers get 8.33% off their annual charges but see if you can spot that in the ad below.
In short, E.ON's deal isn't awful but it also isn't too far from its usual offers, never mind those of other providers who have cheaper rates online. The deal comes in a long line of energy saving tariffs that aren't quite what they seem.
Ofgem have repeatedly warned energy firms that they need to simplify the deals they offer to consumers and make it easier to compare energy.
The increase in the number of tariffs, from 180 to more than 300 since 2008, has stifled competition rather increased it, the regulator said in March.
Scottish Power to increase gas bills by 15%
Gas prices for the provider's 2.4 million customers will rise 19%, while electricity prices will rise 10%.
For the average duel fuel Scottish Power household, that translates to £175 more a year.
Energy companies have been warning for a while that global energy supply disruption will increase prices but Audrey Gallacher, head of energy at Consumer Focus, said that the increase was a "body blow for consumers".
"Companies have been softening customers up for price rises for months but customers will be shocked at the scale of this rise. Every household in the country will now be bracing themselves for impact," she added.
Scottish Power attempted to soften the blow by announcing two new fixed price energy deals alongside its shock price hike.
It claims that the Scottish Power Direct - October 2012 online only package is one of the UK's cheapest, although it admits that it has "limited availability" and prices are guaranteed to be just 1% lower than normal direct debit prices.
Scottish Power also added that their Fixed Price Energy - January 2015 offer is one of the UK's longest running energy deals.
Raymond Jack, Scottish Power's UK retail director, also suggested that consumers could cut costs by increasing energy efficiency and changing billing habits.
"Some of our customers could save an average of £459 per year by making simple changes to the way they pay for their energy, switching to paper free online billing and selecting one of our new or existing energy products," he said.
Scottish Power is already under investigation by the energy regulator, Ofgem, for unfair pricing and mis-selling.
More broadly, the regulator has expressed fears that the 'big six' energy companies are too quick to increase prices to cover an increase in wholesale prices and not quick enough to bring them down again.
International pressure pushing up fuel costs, SSE and Centrica warn
SCOTTISH and Southern energy have become the latest firm to warn customers that their energy bills will rise this year.
Centrica - which owns British and Scottish Gas - also released a warning about rising home energy bills earlier this month.
The situation in Libya as well as increased demand in Japan following the crisis at their nuclear power plants mean that the wholesale price of gas is set to rise.
Both Centrica and Scottish and Southern Energy are planning to pass on that cost to their customers despite that fact that both are either predicting or posting hefty profits for the year.
Ian Marchant, Scottish and Southern's chief executive was apologetic about the increase.
"It's not something I enjoy doing," he said. "It's the most disappointing thing we had to do last year.
"However, I'm faced with a commodity price that's increasing."
Ofgem
The threat of increases comes just months after energy regulator Ofgem warned that it was going to get tough on the UK's residential electricity and gas suppliers.
The market seemed much keener to put up prices after a rise in underlying costs than it did to put them down when wholesale prices fell, it said.
But Audrey Gallacher, head of energy at Consumer Focus, warned that the regulator must make good on its threats.
"If [Ofgem] isn't satisfied that price rises are fair, and that suppliers are making the changes on transparency and service needed, the threat of a Competition Commission inquiry must become a reality," she said.
A Competition Commission enquiry into the energy sector could take years and cost the UK's big suppliers millions of pounds in compensation.
Yet so far firms seem to be moving slowly in response to Ofgem's list of complaints.
The regulator also said that consumers were being completely bamboozled by a hugely inflated number of energy tariffs, many of which were completely failing to offer value for money.
So far, though, a decrease in the number of energy deals - or even significantly more clear billing practices - don't look all that likely.
Centrica profits up £2bn as fuel bills rise
CENTRICA, the firm that owns British Gas, is set to unveil pre-tax profits of £2billion this week.
The group's profits have risen by about 30% and, given the sharp rises in energy costs for ordinary households this winter, it's bracing itself for criticism.
According to Uswitch, the average household energy bill in 2011 will be £1,133, £63 more than last year.
"We expect customers will be shocked by the level of these profits," said Mark Todd, director of energy comparison service energyhelpline.com.
"This has been a very tough year for consumers, but it looks like it's been a very good year for some power suppliers. Customers will find it hard to reconcile such big numbers with the recent round of price increases."
Already under investigation
The prices of the big six energy suppliers - EDF, ScottishPower, E.ON, Scottish & Southern, npower and British Gas - are already under investigation by regulator Ofgem after allegations of overcharging.
All of the six have increased prices this winter, blaming a 40% increase in the wholesale price of gas.
EDF was the last to put costs up, announcing an increase in prices from March a few weeks ago that will affect 3.3 million customers.
The first round of price rises came in November 2010.
Centrica is also expected to cite wholesale prices as a reason for increasing prices but also to warn that only profitable businesses will be able to invest heavily in the UK's energy infrastructure.
If Ofgem disagrees that these are reasonable excuses, they could take the energy companies to the Competition Commission.
It's a fate the energy companies are keen to avoid. Not only could it result in hefty fines, an investigation could take up to two years and would, the companies argue, stifle investment in the sector.
Npower latest to hike prices for winter
NPOWER has become the latest utility company to raise gas and electricity prices for consumers just as the winter cold sets in.
From January, prices will rise by about 5% for the average Npower which amounts to about £54 extra a year for duel fuel customers.
Not everyone will be affected, however. Those on fixed rate energy plans won't be affected and those on social tariffs won't see a change to their prices until April.
Npower's price hikes join three more of the big six, British Gas, Scottish Power and Scottish and Southern energy.
EDF are the only company that has said it won't increase prices until at least March, although a minority of customers did experience price increases in October.
British Gas customers started paying more for their energy today.
All the utility companies have said that they are merely being forced to pass on an increase in wholesale energy prices to consumers.
Ofgem will decide whether that's actually the case when they complete their investigation into the market.
Just because prices have increased doesn't mean there aren't differences between suppliers and, more importantly, there are certainly differences between online and standard tariffs and between direct debit and non-direct debit payments.
Kevin Miles, CEO of npower retail, agreed: "When wholesale costs are driving prices up it's a good time to review the way you manage your energy. Making the right choices can help to offset any increase in the bill."
Audrey Gallacher, head of energy at Consumer Focus, said: "Npower customers will have been bracing themselves for this bad news after the increases from other firms, but that will not make them any less worried about affording their bills this winter.
"With four of the big six suppliers having now announced price rises averaging 6%, the focus on Ofgem's review of whether energy prices are justified will be even sharper."
British Gas Hike Prices Just in Time for Winter
BRITISH Gas have hiked their gas prices by an average of 7%.
How much more households end up paying will depend on their current tariff and their area but only those on fixed rates will escape an increase between 4 and 10%.
On average, the increase will increase gas bills by £80 a year.
Last month, Scottish and Southern Energy announced a price hike that will see their average customer paying 9% more for their energy.
Only EDF energy has committed itself to not raising gas prices until at least March.
Switch to save
It takes around two months to switch energy supplier so the British Gas announcement will leave many paying the increased rate at least during the first few winter months.
Consumer groups urged British Gas customers to switch tariffs and to seek out online deals if possible.
Online-only energy deals currently offer the cheapest rates for energy use while many providers offer incentives for duel customers.
Energy comparison is notoriously complex though and relies on geography as much as it does direct debits and bills by email so it's vital that consumers compare based on the options available to them and their consumption rather than looking at providers as a whole.
"Those worried about their winter bills should switch now," Mark Todd at energyhelpline.com commented.
"There are many cheaper options available. Some could save customers up to £300 a year."
British Gas response
Speaking to the BBC, Phil Bentley, Managing Director of British Gas, said that the increase was out of the energy providers control since the wholesale price of gas has been rising.
Bentley said the company would try and help those who struggled to pay the bills and try to help customers reduce bills by making their homes more energy efficient.
He also pointed out that the provider's average customer will still pay £20 less, after these price rises, than they would have done four years ago.
Scottish and Southern Energy increase prices 9.4%
SCOTTISH and Southern Energy have announced this morning that they'll hike gas prices by 9.4% from December 1st.
The increase will affect 3.6 million customers just as gas bills are set to rise for winter.
"The last few months have been marked by rising wholesale gas prices and, having absorbed losses in our gas supply business for some time, we can not delay an increase in retail prices any longer," said Alistair Phillips-Davies Energy Supply Director at Scottish and Southern Energy.
"I am sorry it will take effect during the winter period."
According to Uswitch, the average dual fuel customer with the company paying by cash or cheque pays £1,159 a year. After this increase, that average bill will rise by £67 to £1,226.
Martin Lewis, founder of MoneySavingExpert.com, said: "This increase is like a slap across the face. It's the first real price hike, as all the other energy news have been about tariff tidy ups. But the scary thing is SSE is unlikely to be the only one to do this."
20% of consumers are struggling to pay their energy bills, according to a Uswitch survey released earlier this week.
73% of households have already cut back on their energy usage or intend to do so in an attempt to cut their bills. 48% of those polled said that they've attempted to make their homes more energy efficient this year.
Ann Robinson, director of consumer policy at uSwitch.com, said: "The high cost of energy coupled with last year's bitter winter has had a lasting impression on British householders.
"In some ways it has acted as a force for good, encouraging people to make their homes more energy efficient in time for this winter. But it isn't all positive news and the big concern is for those who have been left behind, who cannot afford to make their homes energy efficient, and who look set to face another winter of self-rationing to stop their fuel bills going through the roof."
EDF electricity prices to increase by 2.6%
EDF have announced that they will increase standard electricity prices for millions in October.
The energy company estimates that 1.2 million customers will be affected by the 2.6% price increase, a minority of EDF's 5.5 million customers, and EDF estimate that it'll result in a bill hike of "under £1 a month".
This is a geographical increase - bought in to conform with OFGEM's guideline that differences in the cost of delivering energy services in different places should be reflected in the cost paid by consumers - and will disproportionally affect EDF customers who live outside of London and the South East.
Only Economy 7 meter customers in those areas will be affected and those on Online Saver deals 3-7 won't be affected, no matter where they live.
Martin Lawrence, Managing Director, Energy Sourcing and Customer Supply at EDF Energy, said: "EDF Energy has made every effort to minimise the size and impact of this price increase, which is why we are offering Standard tariff customers Energy Discount Plan so they can maintain their current prices.
The rise in transmission and distribution costs has impacted the cost of supplying energy to our customers. We have been absorbing these costs for many months, but we now have to pass on some of the resulting rise to our customers.
The firm is offering customers the opportunity to switch to their cheaper fixed length price plan - Energy Discount Plan 3 - in anticipation of the price increase. However, this will just maintain the standard EDF prices which aren't the cheapest in any case.
Consumers with other energy firms shouldn't see this as the first in a wave of price rises, according to analysts. Mark Todd, co-founder of Energyhelpline.com commented, "This is an ominous sign but I do not expect a big wave of rises just yet. Our view is that prices will rise in the winter by 5% to 10%."