Energy bills: EDF to increase prices in March

EDF Energy is the last of the major suppliers to make an announcement on prices

EDF Energy is to increase gas prices by 6.5% and electricity prices by 7.5% from 2 March, the company has said.

The company is the last of the "big six" energy firms to increase prices, and it follows a heavily-promoted decision to freeze prices over the winter.

EDF blamed wholesale costs and other charges for the change.

Energy regulator Ofgem is currently investigating the prices charged to domestic customers.

Price changes

The move from EDF comes the day before E.On's price change comes into effect. E.On's customers will be subject to an average 9% increase in electricity prices and a 3% rise in gas prices.

In the last week of November, Scottish Power increased electricity bills by an average of 8.9% and prices for gas customers increased by an average of 2%.

Scottish and Southern Energy followed by putting up its domestic gas tariffs by 9.4% at the start of December.

The 7% rise in gas and electricity bills for British Gas customers started on 10 December.

Npower customers saw their gas and electricity bills rise by 5.1% on 4 January.

'Regret'

EDF, which has about 5.5 million customers in the UK, said that this was the first time it had increased gas prices since 2009, but electricity prices have risen more recently.

It said network charges and environmental obligations, in addition to wholesale costs, had forced it to put up costs for customers.

"Although we regret the need to raise prices, we held out for longer than all of the other major suppliers," said Martin Lawrence, a senior manager at EDF Energy.

The change will add about £72 to the annual bill of a typical dual fuel EDF Energy customer, according to price comparison website Uswitch.com.

"While this news is not exactly welcome, EDF Energy's customers will be relieved that their supplier protected them from higher prices through the winter, when the impact on bills would have been far more severe," said Ann Robinson, of Uswitch.

"This is the last in a line of energy price hikes to hit British households and the impact should not be underestimated."

She estimated that including EDF Energy's move, prices have increased by 6% or £63 on average across all the major suppliers, taking the typical household energy bill up from £1,070 to £1,133.

Review

Audrey Gallacher, of watchdog Consumer Focus, said: "EDF Energy's customers will be hugely disappointed that the supplier has chosen to up its prices as soon as possible after its price freeze ends.

"Consumers will be further annoyed that this rise is even higher than that of most other suppliers, particularly given that the firm already increased electricity prices in October."

Regulator Ofgem is reviewing the domestic energy market to see if more action is needed to protect consumers.

The work will be completed by March and will study the "effectiveness of the retail market".

A previous investigation of the market in October 2008 found no evidence of anti-competitive behaviour in the sector.

The price rises across the industry could affect businesses, as well as domestic customers.

"Manufacturing companies and other large energy users cannot pass the rise onto customers in the current market, so they are forced to reduce their overheads by laying staff off or making redundancies," said John McShane, managing director of energy analysts Saturn Energy.

"Businesses will now have to look at what else they can do to reduce energy consumption and save on costs."