Brace yourself for New Year energy price hikes

Some people will start the New Year with not just a hangover but also the headache of energy price hikes.

On New Year’s Day Scottish and Southern Energy customers will see prices soar by 12.20 per cent for gas and 9.4 per cent for electricity, bringing their average annual energy bill to a total of £927.20 – (£353.52 for electricity and £573.68 for gas).

Eight days later British Gas will be lifting the “price freeze” on its Click Energy online tariff, making it the most expensive online tariff on the market. With an increase of £103.57 on average per year this is a not so consumer-friendly move from an energy giant that has hit consumers with some of the biggest price hikes in 2006.

This year people have been victim of an unprecedented number of price hikes from the “big six” energy providers, and in a sly move to try and stave off criticism, suppliers broke with the norm by announcing some of these price hikes in the summer.

Paul Schofield, head of utilities at moneysupermarket.com said: “With cold winter months still to come, it looks like some people will bear a double brunt financially as the cost of keeping a house warm increases in the New Year. It is disgraceful that companies are announcing price hikes in the summer months and sneaking them in when the weather is at its coldest.

“Scottish and Southern raised its prices twice in 2006^, and when announcing a third hike in September pledged not to put prices up before 2007^^. The company has taken this statement too literally by introducing the hikes on New Year’s Day; consequently Scottish and Southern have certainly put a dampener on its customers’ New Year.”

Despite the rise in British Gas Click Energy online tariff, research from moneysupermarket.com reveals opting for an online deal could save people money. For example someone on a standard British Gas tariff costing £1,055.77 on average per year could save £177.57 on average a year by switching to npower’s online deal.

Online tariffs allow consumers to manage their accounts via the internet, with the supplier usually offering a discount in return. Consumers must pay for their energy by monthly direct debit

*Not and online tariff but e-billing tariff. E-billing is an easy to use online service which allows customers to manage their account 24 hours a day, 7 days a week. (This service is available to domestic customers only except those on an easywarm tariff or who have a token or key meter.)

Paul Schofield added: “Having frozen prices on its Click Energy online tariff barely four months ago, British Gas’s place as the provider with the least expensive online tariff was short lived. It is now the most expensive provider for both online and standard tariffs.

“With no certainty of energy prices going down in 2007, people with internet access should consider switching to an online tariff. When compared to standard tariffs our research shows online deals are particularly competitive and the potential to save £177 per year should not be overlooked. The ease of dealing with payments online will also be a benefit to some people.”