More Firms Increase Energy Bills

Two more energy firms have said they will increase gas and electricity prices, blaming higher wholesale costs.

Scottish Power said it would raise gas prices by an average of 34% and electricity prices by 9%, effective from Monday 1 September.

Soon after, Npower said domestic customers would see an average rise of 14% for electricity and 26% for gas, effective immediately.

E.On, British Gas, EDF and Scottish and Southern Energy have all raised prices.

Scottish Power said it was "forced to follow other energy providers".

"These are difficult times and we understand the financial impact this announcement will have on our customers," said Willie MacDiarmid, Scottish Power's director of energy retail.

He added that the volatility in the gas market was contributing to higher UK domestic prices.

Dual fuel customers will see their bills increase by an average of 25%.

Scottish Power also said it planned to spend £40m on steps to help protect vulnerable customers over the next three years.

The firm, owned by Spain's Iberdrola, is to invest £2.8bn from 2008 to 2010.

Squeezed'

Npower said: "Today's price rises are due to massive increases in wholesale costs which make current pricing levels unsustainable, following a price decrease in 2007 and an increase at the start of 2008."

"Until today Npower's domestic gas prices were still the same level they were 18 months ago - whereas, during this time, the cost of wholesale gas has doubled," said the firm.

The company also said electricity generation was directly affected by "soaring raw material prices, which have risen by 122% for gas and coal, and 79% for oil, over the last 12 months".

The firm said it took the decision very reluctantly, "especially as household budgets are being squeezed so much at the moment".

This marks the second wave of price rises for both providers since the start of the year.

Scottish Power had increased prices on 1 February while Npower had raised prices on 4 January.

'Consumers struggling'

Following the latest rises, Energywatch urged the government to adapt an action plan to provide "real support to consumers struggling to pay energy bills that have gone up by almost 40% this year alone".

Average prices have risen 38% in 2008, eclipsing 2006 when average prices rose by 32%, said the watchdog.

Ofgem is set to release an investigation into energy markets in the weeks ahead

"There is strong expectation that the government will shortly announce a raft of measures to protect the most vulnerable," said Energywatch director of campaigns, Adam Scorer.

Gordon Lishman, Director General of Age Concern, said: "Many pensioners, already worrying about whether they can afford to heat their homes this winter, will be outraged by news of yet more colossal price hikes."

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