Feeling the heat of the sneaky summer energy price rises

As gas and electricity giants put up rates again, it's essential to look for a better deal, warns David Prosser
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At the end of August, Powergen will raise its prices by 7.9 per cent for electricity and 11.9 per cent for gas, adding £95 to a typical customer's bills. EDF is increasing its gas and electricity prices this week by 12 per cent and 10.7 per cent respectively, a typical extra bill of £108.

Analysts such as the price comparison service Simply Switch are particularly angry because these are just the latest in a series of increases - at EDF, this is the fourth price hike since March last year, while Powergen has raised its charges three times over the past 18 months.

"Many householders are going to be hit hard," says the Simply Switch boss Karen Darby. "For every 10 per cent rise in energy prices, another 500,000 people are thrown into fuel poverty."

The two companies are not alone in raising prices during 2005, after increases in the cost of wholesale gas. British Gas, for example, has raised prices 18 per cent since the beginning of last year, while bills at Npower, Scottish Power and Scottish & Southern are all up by similar amounts.

Mark Todd, of the analyst Energyhelpline.com, says he expects further price increases later this summer, as EDF's and Powergen's rivals follow their lead. "The Government and the regulator Ofgem should take action now to make this market more competitive and to bring prices down," Todd maintains.

He points out that in the case of EDF, whose subsidiaries include London Energy, Seeboard and SWEB, prices are now up by almost a third compared with 18 months ago. "The best way to avoid these rises is to switch now," Todd adds.

Since the energy market was deregulated in the Nineties, changing gas or electricity provider has become relatively straightforward. Your account is simply transferred to your new provider, with no alterations in your property necessary.

However, many homeowners have not checked what savings might be available. Ofgem reckons just half of the 17.5 million or so households that receive gas and electricity have ever changed provider. Todd believes homes that have not yet switched at least once could save £170 a year. "It is still possible you could pay less this winter than last," he says.

Start by consulting one the many price-comparison services that offer free advice over the phone or online. These include Simply Switch, Energyhelpline.com and the biggest company, Uswitch. They ask you for basic details about where you live and energy usage, before working out which company would offer you the best deal. They also carry details of alternative pricing structures.

Fourth price increase was the final straw

For Pauli James, who lives in Tunbridge Wells, EDF's latest price increases were the final straw. "We were told last year that prices would be capped for two years and I thinks these increases are immoral," she says. "How are older people expected to cope with the higher bills?"

Following EDF's announcement, Pauli decided to part company with her gas and electricity supplier Seeboard, a subsidiary of the company. Using internet-based price comparison service Uswitch, she has now moved both accounts to rival provider Tesco.

"Price isn't necessarily the only issue to consider because other issues can reduce or increase what you end up paying," Pauli adds.

"I chose Tesco, for example, because it offers cashback vouchers and I already do a lot of other business with it."

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