Price rises coincide with expensive winter fuel bills

Customers who are affected by the move will see their bills increase by 6.9% for electricity and 4.9% for gas on average.

The price rise will put �17.25 a year on the average household electricity bill of �250 and �17.50 on the average annual gas bill of �350.

The rises will be phased in around Christmas and New Year, and delayed for some vulnerable customers.

Differing impact

Powergen is the first household supplier to announce increases for 2004.

We question whether some of these increases are entirely justified. Both gas and electricity prices have started to fall Allan Asher, Energywatch

The company blamed rising costs.

It said wholesale costs has risen by more than 25% in the past year for electricity and 18% for gas.

When the price changes take effect will depend on the tariff.

Powergen said the majority of domestic and small business customers would be affected from 5 January 2004.

For Powergen-serviced electricity customers, the price change will take effect from the first meter reading after 14 November.

For all Vertex service, or former TXU Energi electricity customers, the change is effective from 5 January 2004.

Temporary reprieve Age Concern customers - prices will be reviewed in the Spring Prepayment customers (electricity and gas) - increase from 1 April 2004 Staywarm customers - price rises when current deal expires Former Amerada Online customers - increase effective from 1 April 2004

Groups that are excluded from the price changes at the moment, include Age Concern customers who will have their prices reviewed in the Spring and prepayment customers, who will have their rise delayed until 1 April 2004.

Nick Horler, managing director, Powergen Retail said: "Powergen is not alone in facing these increasing costs but it is the only leading energy supplier not to have raised its consumer electricity prices in seven years."

But the gas and electricity watchdog Energywatch said it would be bad news for customers at the most expensive time of year.