Utilities companies set for another round of price hikes in line with Ofgem ‘green’ mandate

Utility companies are expected to announce another set of gas and electricity price hikes this summer, following the increase in gas prices announced by British Gas, Powergen, Scottish Power and London Electricity at the start of the year.

Energywatch, the consumer watchdog, lambasted the gas suppliers for raising their gas prices and also called for consumers to boycott British Gas – the first to announce an increase (MW January 10).

Because the new price hikes will be a result of energy saving targets set for utility companies by the energy regulator Ofgem, Energywatch does not plan to protest against the second round of electricity price hikes.

Under these targets – set for the 2002 to 2005 period – companies have been asked to achieve energy savings by installing efficiency measures, such as energy-efficient lightbulbs and other appliances in customers’ homes. At least 50 per cent of these measures will target customers on benefits or fuel-poor customers. The companies are planning to achieve these targets by passing on the costs of installing energy-efficient measures to their “non-fuel poor” customers.

According to a spokeswoman at Energywatch: “Energywatch is aware that the costs of achieving energy-saving targets will be passed on to consumers. But the benefits of achieving these targets will outweigh all that.”

A spokesman for a utility company says that Government plans to encourage renewable energy could mean yet another spate of gas and electricity price increases in the near future. However British Gas denies any plans for further price hikes.

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