EDF Energy price rise is final energy blow as winter arrives

EDF Energy has become the fifth of the “big six” energy suppliers to announce gas and electricity price increases this autumn.

The supplier is to raise energy prices by an average of 10.8 per cent from December 7th. This is four times the current rate of inflation.

This means that a typical standard rate dual fuel energy tariff will increase in price by £2.35 a week and the annual bill is estimated to increase by £122 to £1,251 a year. The move will affect EDF Energy's three million customers.

Consumer groups have accused the main utility suppliers of operating with a pack mentality as they follow each other in raising prices.

Audrey Gallacher, Director of Energy at Consumer Focus, said: "EDF Energy's tariffs will still be slightly cheaper on average than other suppliers who have increased their prices - but this will be little comfort to those seeing a double-digit percentage rise on their bills.

"Another price rise, hot on the heels of those we've already seen, will again feed into consumer concerns on pack behaviour and whether price changes are driven by real supply and demand issues."

SSE was the first company to raise prices followed by British Gas, Npower and Scottish Power. E.On is the only company that has not raised prices in the last two months. It promised not to increase prices during the rest of 2012. Howver, most analysts expect E.On to announce a price increase in January.

These six suppliers control 99 per cent of the energy market in the UK.

EDF Energy have countered, saying that even after the price rises their tariffs are still the lowest of the five companies that have increased prices.

Martin Lawrence, Managing Director of Energy Sourcing and Customer Supply said: “We know that customers will not welcome this news and do not want to see prices going up.

"Our new prices will, however, be cheaper on average than those of all the other major suppliers which have announced standard price rises so far this autumn."

However, Labour's shadow energy secretary Caroline Flint said: "People will not understand why EDF are hiking up their bills by so much when they made nearly £1.6 billion in profits last year."

Last year EDF paid out £1.87 billion in dividends to shateholders and paid its chief executive, Vincent de Rivaz around £1.2 million.

Energy minister Greg Barker said: “This is very unwelcome, and I know lots of families who are struggling to balance their budgets will be very disappointed and concerned by these price rises.”

The EDF price rise comes as little surprise. The energy companies blame the increased cost of wholesale gas, increased transportation costs and the cost of securing future gas supplies and government environmental obligations for having to raise prices.

However, consumer groups have criticised the big energy suppliers for displaying a “Pack” mentality and raising prices one after another.

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Ann Robinson, Director of Consumer Policy at uSwitch.com, said: "This is the final hammer blow for energy bills this side of Christmas. Consumers now face a winter of rationing their energy usage.

"Consumers who don't shop around for a competitive energy tariff may have a bitter pill to swallow following this round of price rises."

The price increase by EDF Energy is the biggest increase so far of the five major companies that have increased prices. By contrast, British Gas raised gas and electricity prices by just six per cent.

It says that the most vulnerable elderly customers will be moved onto the cheapest tariffs automatically.

Martin Lawrence, Managing Director of Energy Sourcing and Customer Supply said: “We know that customers will not welcome this news and do not want to see prices going up.

“We’ve taken extra measures to make sure the most vulnerable benefit from the best deals and we continue to help customers reduce their bills with energy efficiency measures.”

EDF Energy has also updated its fixed rate energy deal. Its Blue Plus Fixed Price March 2015 tariff is now available to allow customers to fix their prices for three winters.

Clare Francis consumer finance expert at MoneySupermarket.com said: "EDF Energy has also today removed its Blue+ Price Promise May 2014 fixed product from the market, and replaced it with a March 2015 product - at £1,251 a year, £108 more expensive. 

"But that's not all, the 2015 product also has associated early termination fees of up to £35 per fuel if the customer changes supplier before 31st March 2013.  For those looking for a fixed product, the early termination fee is certainly something to bear in mind."

Kate Rose, Head of Energy at Confused.com said: "If consumers haven't already we cannot urge them enough to switch now, to make sure they are on the cheapest tariff for them, and look at the fixed price tariffs available which could protect them from future price rises."

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