Evening Telegraph (First Edition)
12.5% price hike in electricity tariff
BRITISH Gas has announced it is to hike its electricity tariffs by 12.5% in a move affecting 3.1 million customers.
The Big Six energy giant confirmed the price rise, which will take effect on September 15, after a blunder yesterday saw the group mistakenly publish an incomplete statement about increasing electricity tariffs on its website.
Centrica-owned British Gas said the price rise is its first since November 2013 and the group pledged to help protect more than 200,000 vulnerable customers from the increase.
Details of the increase come as Centrica posted half-year results revealing earnings from its consumer business plunged by more than a quarter after it lost 377,000 UK customer accounts.
Underlying operating profits from its UK home energy supply arm tumbled 26% to £381 million as the group said it was also hit by warmer than normal temperatures and the pre-payment tariff cap.
Centrica’s overall underlying operating profits were 4% lower at £816 million for the six months to June 30.
The group said it held off from the price rise for “up to six months longer than some of our competitors”.
The price hike will mean an average dual fuel bill for a typical annual household tariff will rise by £76 to £1,120 — a 7.3% increase, according to British Gas. The group said it will give more than 200,000 customers receiving a warm home discount a £76 credit.
British Gas is the last of the Big Six providers to increase prices after it promised in December last year to freeze tariffs until August. The group insisted its overall electricity costs had increased by 16% since 2014.
But the move flies in the face of the Government, which made a pre-election pledge to introduce a price cap, although that has since been watered down to cover vulnerable households only.
Centrica chief executive Iain Conn said that while the commodity price of electricity had come down, it was facing “significant cost pressure” on transmission and distribution, as well as costs associated with Government policy.
A spokeswoman for the Department for Business, Energy and Industrial Strategy said: “We’re concerned this price rise will hit many people already on poor-value tariffs.”
The Government says its policy costs make up a relatively small proportion of household energy bills and cannot by themselves explain price rises announced by energy suppliers.