EDF Energy was today the first of the Big 6 energy suppliers to announce its second retail price hike of 2008.
The Bad News
Effective immediately (that is, as of today) EDF Energy gas only customers will see their gas bills up by £143 a year (+22%) to £784, their electricity bills up by £65 a year to £446 (+17%) and their Dual Fuel bills up by a whopping £204 a year to £1,190 (+21%).
The Good News
It could have been a lot worse. As we said in our update of last week, even a falling oil price environment was not going to save the consumer from another energy price hike. We said….
“The sell off in wholesale energy markets makes for a welcome change. It has unfortunately come too late in the day and from too high a level. Energy suppliers need to go into the market over the coming weeks and months to hedge their energy buying and the prices they are going to have to pay means another big increase in retail energy bills is unavoidable.”
We went on to say…
“The best we can now hope for is that, against this backdrop of falling energy costs, the energy suppliers show some restraint with their increases. Rather than one massive hike we would prefer to see a smaller increase now, say 15-20%, followed by a further increase next spring if it is still justified. That way, consumers have more time to adjust to the additional cost burden.”
What we got was pretty close to the best that could have been hoped for…for now. Unfortunately, it is not all over yet.
What we think:
Last chance to fix your energy bill…
Today’s announcement from EDF Energy was not unexpected. Although consumers will fail to see how this can be anything other than bad news for them, the reality is that it could have been a whole lot worse. Even after this increase, we can expect another £200 on energy bills in the winter of 2009 unless wholesale energy prices come down dramatically.
Capping or Fixing your energy tariffs has been our recommended strategy all year and still remains unchanged. This weekend may be the last chance you get to cap your energy tariffs at the pre-increase levels.
Best Capped/Fixed Energy Deals (25 July 2008) Payment by Monthly Direct Debit
The British Gas Price Guarantee 31 Dec 2009 carries a potential cancellation charge for early termination of the contract. The cancellation charges are £20 for electricity and £75 for dual fuel. The E.ON Energy Saver 4 tariff comes with a free energy monitor and carries an early exit penalty of £35. The ScottishPower Fixed Price Energy 2009 tariff is fixed until 31 August 2009 and carries an early exit penalty of £30 for electricity and £50 for dual fuel. The EDF Energy Price Protection 31 Oct 2009 carries an exit penalty of £20 for electricity and £50 for dual fuel.
Latest Price Changes
The increase for E.ON is higher than the headline numbers quoted by the company because it takes into consideration the loss of discount for late pay cash/cheque customers.