Pre-payment energy rise could trigger ‘big six’ hikes

MILLIONS of struggling households are facing a £58-a-year increase in energy bills in a move expected to trigger big rises for others.

The increase applies to four million households that have pre-payment meters and another million poor and vulnerable customers.

They all qualify for a so-called ‘safeguard tariff’, which is policed and set by the industry regulator, Ofgem.

The tariff will rise in April, taking the typical annual bill from £1,031 to £1,089 – an increase of 5.6 per cent. The hike is being blamed on higher wholesale prices for gas and electricity, plus increases in the cost of subsidising a switch to wind farms.

Some of Britain’s poorest families will be hit by the rise, which will rake in about £280million a year for energy firms, despite their record of profiteering and poor service.

It also clears the way for the ‘big six’ energy companies – British Gas, SSE, Npower, EDF, Eon and Scottish Power – to raise their tariffs for millions of other customers.

Ominously, their trade body, Energy UK, said yesterday the fact the cap on the safeguard tariff was rising ‘does show how energy costs, which are out of any suppliers’ direct control, are increasing’.

Announcing the changes, Ofgem chief executive Dermot Nolan said the £58 increase is based on a formula designed to reflect changing industry costs, rather than lobbying from energy firms.

He said that the changes were not a ‘green light’ for wider increases in tariffs, but admitted he was powerless to stop this happening.

Subsidising switch to wind farms