12th Nov 2013 13:39
LONDON (Alliance News) - EDF Energy has become the latest energy company in the UK to raise prices for its customers, with a 3.9% increase on its dual fuel tariffs.
The UK energy supplier said its new average standard variable price, effective from January 3 2014, will now be GBP1,300, a rise of GBP49 a year.
The company said it has taken action ahead of the outcome of the Government?s review of the costs of green taxes and other schemes, along with increasing prices to bring energy into homes and the higher price of raw materials.
The company said that its rise is less than half that of its rivals but that if the government fails to reduce green levies, the firm might have to put up its prices further.
EDF has become the fifth of the so-called big six energy providers in the UK to announce price rises, following SSE, British Gas, NPower and Scottish Power, with an average increase across the four of 9.1%.
The Daily Telegraph reported Monday night that E.ON, the final major energy company which has not yet increased tariffs, is planning to unveil a rise of 6.6% in gas and electricity rates later this month, with the increase set to take effect in early January.
Energy prices are turning into a political football ahead of the next election. Dwindling household budgets are set to become one of the main features of political campaigns as wage growth remains low while things like energy prices increase at rates well above inflation.
The energy companies have blamed a combination of higher wholesale prices, rising costs for maintaining infrastructure, and the cost of the government's green energy taxes. However, critics say the firms aren't helping to limit consumer price increases by using some of the huge profits they make from power generation.
UK Prime Minster David Cameron in October announced a review of green energy taxes after admitting they have contributed to recent increases in the average energy bill. The prime minister told MPs that household bills have been pushed up to "unacceptable" levels and he wants to cut back environmental regulations and charges which he said the last Labour government allowed to get out of control.
Green taxes, he said, accounted for GBP112 of the average annual dual fuel bill, equivalent to 9% of what customers are paying, and could be reduced.
However, a document released by the Department of Energy and Climate Change in March stated that by 2020 the green energy policies, including building regulations, would actually bring down the average price of energy by GBP166 a year.
Cameron also announced a new competition test for suppliers in order to limit any unacceptable levels of profits and make the market more fair for the consumer.
"Trust between those who supply energy and those who use it is breaking down. It is so difficult for people to work out what exactly they are paying for, that they fear the big energy companies are taking them for a ride when bills go up," UK Energy Secretary Ed Davey will say in a speech to Energy UK on Tuesday.
However, Davey told BBC Tuesday that, "any price rise is disappointing but I?m encouraged that EDF have kept their price rise much closer to inflation than some of their competitors."
The increase also comes after the Labour opposition leader Ed Miliband said he would freeze prices for gas and electricity for two years if he gets elected in 2015, and politicians from all parties were quick top politicise the issue in a growing debate about rising consumer living costs.
"Labour has been saying for some time now the wholesale cost doesn?t reflect the rise in our bills. We shouldn?t let EDF off the hook either because actually the green levies on our bills cannot account for these price rises," the UK shadow Energy Secretary Caroline Flint told the BBC Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
Copyright © 2013 Alliance News Limited. All Rights Reserved.
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