Powergen customers are facing further price rises

Gas prices for consumers are to rise by 9.6% - the third rise this year - while electricity prices will be increased by 8.9%, the German-owned firm said.

The increase means that gas prices for the company's six million customers will have jumped by 17.6% during the course of 2004 alone.

It was the second rise for electricity prices, which rose 6.9% in January.

It's going to be a miserable winter for hundreds of thousands of consumers thrown into fuel poverty Allan Asher, Energywatch chief executive Q&A: Changing energy supplier

The higher prices will mean an average rise of �55 per year for duel-fuel customers, �23 for electricity and �34 for gas. The new charges come into force on 29 November.

Powergen blamed the latest rises on the "unparalleled rises in wholesale costs", which have been tracking surging oil prices.

Surging costs

"This price rise is not a step we've taken lightly," said Powergen Retail managing director Nick Horler.

"All suppliers are currently affected by rising wholesale costs and we've delayed this increase for our customers longer than most of our competitors."

Surging costs have hit all energy suppliers and led to a spate of similar moves across the industry.

In August, British Gas upped its prices, shortly after similar moves by EDF which affected around five million London Energy, Seeboard Energy, SWEB Energy and Virgin Home Energy customers.

"The message to Powergen customers is to take some smart steps to cut your bills," said Allan Asher, chief executive of gas and energy watchdog Energywatch.

POWERGEN PRICE RISE For duel-fuel customers prices will increase by an average of �55 per year Electricity bills will increase by an average of �23 a year Gas bills will rise by an average of �35 per year

"There are still savings to be had of up to �100 a year if you have never moved from your original supplier and every household can save by becoming more energy efficient."

At the same time as announcing the price rises, Powergen announced an �8m package of measures - such as free cavity wall insulation for customers over 60 and those on income or disability benefits - designed to help cut customer bills.

"We recognise this is a difficult time for some customers and we're keen to offer everyone support and advice to minimise the impact of this price increase, which is why we've also moved quickly to provide our most vulnerable customers with special measures," Mr Horler added.

But while Energywatch welcomed the initiatives, it did add that the price rises would be a "heavy financial blow" for the less well off.

"It's going to be a miserable winter for hundreds of thousands of consumers thrown into fuel poverty because of the price rises this year," Mr Asher added.

Satisfaction cools

The news comes in the wake of a customer satisfaction survey carried out by marketing JD Power and Associates.

SELECTED PRICE RISES IN 2004 Powergen - gas up 17.6%, electricity up 15.8% Scottish Power - gas up 11.8%, electricity up 8-9% British Gas - gas up 12.4%, electricity up 9.4% Npower - gas up 11.8%, electricity up 7.6% EDF - gas up 3.5%, electricity up 3.8% TXU energi - gas up 3.45% Source: Energywatch

Powergen led the way for customer satisfaction in the electricity market, while it came third in the eyes of gas consumers behind ScottishPower and Scottish and Southern Energy.

Overall, the poll of 2,646 domestic utility users found that customers satisfaction with the services had dropped dramatically - 33 points over the year for electricity and 32 points for gas services.

The decline coincided with the first increase in the average monthly gas bill since the study started in 2001 - charges have increased 9% this year to �29.78.

Electricity prices recorded their first rise since 2000, increasing 7% this year to an average of �31.58 each month.

What do you think? Are power firms profiteering, or just prudent? Use the form below to send us your views on the rising cost of fuel.

I think its absolutly disgusting that they think they can get away with robbing their customers. If the average business tried to pass on price increases of this magnitude to their customers they would quickly find themselves going out of business.
Joe Peacock, England

My wife and I are both retired and currently paying for our gas and electricity via the Staywarm scheme. Over the last two years the monthly charge has been increased twice by increments just under 20% and is presently �58. All of my enquiries with other suppliers have so far revealed they cannot give me a better bargain, so I consider that relative to the rest Powergen is not profiteering. When the next price review comes (about Easter 2005) my opinion may change.
John Williams, UK

Its a mixture of profiteering and also having to pay for installation of wind turbines and upgrade the grid to feed electricity from remote parts of Scotland and Wales to the industrial heart of England.
David Craig, Scotland

I have just this very week changed my supplier to Powergen. They assured me when I was considering the change there were no price increases in the offing so it would appear that I have wasted my time in doing this.These people are to say the least very annoying.
Gerald Bywater, England

There is no doubt the power firms are profiteering - oil price rise is just an excuse - when oil price goes down why do they not decrease their prices. The goverment should cap these prices but unfortunately the goverment enjoys increasing taxes - so what chance is there of them capping gas and electricity prices. Tony Blair please come in and sort this mess out or you will be losing my vote!!
Raj Kantelia, England

I assumed that powergen had already raised their prices in line with other suppliers and was on the verge of changing to them as their web site guaranteed a price freeze until 2006. How can they break this pledge to their customers?
clive nation, uk

We just received our electricity bill from Basic Power, estimated the charges for next year will be �524, an staggering increase of more than 66% compared with �315 this year for our small flat. We are not sure if it was directly affected by rising wholesale costs or just some suppliers took the opportunity profiteering. Should the government do something about it before the utility prices escalated out of control?
Mrs. Goodall, London

Sadly we are just reaping the rewards of the wholescale sell-off of the UK utilities industry to overseas investors by Margaret Thatcher's government to raise cash in the 1980s . At the time some people warned that we would pay the cost in the future for losing control over the prices of our own utilities, but few people cared to listen, and this is the result.
J Vincent, UK

as customer service employee of powergen gas & electricity i believe there are a lot of misleading info generated to customers. Staff here at Bolton were only informed of the price increase at 11am this morning, to have customers call a few hours later complaining about the increase. i feel very sorry for these customers especially those who are less well off as coming in to the winter period they will be hit hardest. big companies are still making the little people suffer. it's time customers make a stand.
lyndsay, bolton, england

So they will be putting the prices back down again if oil prices drop then ?
Bill Johnson, UK

Personally I thinks power firms are profiteering and the situation is getting ridiculous with two or three price increases per year. We normally have British Gas and Electric from Powergen, but have recently made arrangements to switch to Equipower for dual fuel and it looks as though we have made the right choice at the right time because we look to be saving over �200 a year and I would suggest everyone else switch energy users as well.
David Edwards, England

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