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Utility provider implements ‘shocking’ 19% rise in gas prices and 10% rise in electricity prices, as consumers are urged to switch and fix Scottish Power is to raise the price of domestic gas and electricity bills by 19% and 10% respectively from August 2011, blaming the increases on a rise in wholesale energy costs and volatility in global energy markets. The rise, which will affect 2.4m households and add £175 a year – or 48p a day – to the average dual fuel customer’s bill, was described as a “body blow for consumers” by Consumer Focus . Scottish Power, which last increased prices in November 2010 – raising gas bills by 2% and electricity by 8.9% – said it will notify customers from 11 June, giving them at least 30 days’ notice before the price change is due to take effect. Raymond Jack, Scottish Power’s UK retail director, said: “Wholesale prices for gas and electricity have increased significantly since the end of last year, and continuing unrest in global energy markets means future prices are volatile. We understand times are difficult for many people, and we have done what we can to absorb these additional costs for as long as possible to minimise the impact on our customers. “The rising burden of non-energy costs faced by Britain’s energy suppliers – including the cost of meeting government environmental and social programmes and the cost of distributing electricity on the national grid – has also placed further upward pressure on energy bills.” But the energy provider was blasted by consumer groups who believe its move could prompt a wave of further price rises from the other “big five” energy providers just months after last winter’s price rises. Audrey Gallacher, head of energy at Consumer Focus, said: “This huge increase will be a body blow for consumers, and we fear other firms will follow Scottish Power’s lead. Companies have been softening customers up for price rises for months, but customers 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.” Last winter the big six energy suppliers all announced price rises, with E.ON adding 9% to electricity prices and 3% to gas prices, while British Gas raised both its gas and electricity prices by 7%. Scottish and Southern Energy increased gas prices by 9.4% and npower added 5.1% to gas and electricity prices. EDF raised electricity bills by 7.5% and gas by 6.5%. Householders were warned by British Gas’s parent company Centrica in May to brace themselves for higher gas and electricity bills this winter, and to consider switching to a fixed-price tariff if they want to avoid the pain come December. Centrica suggested in a statement to the City that domestic gas and electricity prices are now significantly lagging behind wholesale prices, which it said have risen by a quarter compared with last year. ‘Under investigation’ Energy regulator Ofgem recently conducted its retail market review of the energy sector, identifying a number of problem areas such as consumer trust, overly-complicated tariffs and unfair pricing. Gallacher said: “It is ironic the [Scottish Power] announcement comes exactly when the regulator is deciding whether energy firms are serious about treating consumers properly and if energy prices are fair. Ofgem has put the big six in the dock, saying suppliers have been quicker to raise prices than to cut them and are bamboozling consumers with complex tariffs. Scottish Power itself is under investigation by the regulator for unfair pricing and misselling. “Suppliers say they have no choice when costs go up, but no one else really knows if energy prices are fair. When this affects the cost of keeping warm and well, it is not an acceptable state of affairs. Energy suppliers are in a deep, deep hole on consumer trust. Now would be a good time for Scottish Power and the others to stop digging deeper and show that they understand what their customers want – fair pricing, fair selling and fair treatment.” Consumer group Which? argues that all energy tariffs should be structured in the same way so that customers can easily compare different deals. Executive director Richard Lloyd said: “This is yet another example of the ‘big six’ blaming the wholesale energy market for increases to domestic customers’ bills, but energy companies have a lot of work to do to convince consumers that energy prices are fair. “Greater transparency about exactly what is driving retail price hikes might help persuade consumers that energy companies are playing fair.” A Scottish Power spokesman said 700,000 households will be protected from the latest price rises because they are on capped or fixed tariffs. A spokesman for Moneysupermarket.com said: “This is a huge increase. Now really is the time to get on to the best-priced energy tariff for your usage level and area you live. “The cheapest online energy tariff is currently Online Saver 10 offered by EDF Energy with average annual bills of £940 but, in the face of rising prices, opting for the market-leading fixed product Fix Saver v2, from EDF Energy with average bills of £1,009, is the best way to safeguard against further price increases from the energy giants.” Energy bills Household bills Consumer affairs Family finances Utilities Mark King guardian.co.uk