Rival UK energy suppliers have been undercut by EDF with 3.9 percent price rise
By Cynthia Taylor
EDF has said that their increase on energy bills will only be 3.9% compared to their rivals who are increasing their bill by double this amount. EDfís announcement has come at a time of political pressure to keep prices down.
The political arena has been dogged by the issue of increasing energy bills, especially since September after the announcement by Ed Miliband to freeze energy bills for 20 month if he wins the 2015 elections.
Four of the Big Six energy suppliers have already increased their prices by an average of 9.1% which is 4 time more than the UK's 2.2 % inflation rate. Which means that consumers will be hit hard with these increases.
EDF has attributed their lower increases to them holding back on rising costs from ECO a government environmental policy, they are pre-empting this promise with regard to reductions.
EDF said that the company had taken action well ahead of governments review outcome of ECO as well as other schemes. EDF has signed a £16 billion deal with government to build the first new nuclear power station in 20 years.
The company announced that their price increase will take effect from 3rd January.
Prime Minister, David Cameron is looking to regain the initiative over the political battle with regard to soaring energy bills. When last month he promised to cut some of the green taxes that energy companies claim have ben the reason for their inflated process.
EDF added that if government makes larger changes for the costs of their social and environmental schemes, EDF have anticipated this and the company pledges that they will be passing on these savings to their customers. However, they did caution that should the changes be less than expected then EDF will have to review their prices again.
The energy prices in the UK have already increased by 24% in the past 4 years, this is according to the Energy regulator, and that Ofgem were going to ramp up pressure on finances for households at a time that wages were stagnating. The Government has promised that they will review competition in the energy market of which 99% is controlled by the Six biggest energy suppliers.
Ofgem is due to report their initial findings with regard to competition at the end of March and has stated that the other suppliers should now compete with EDF and lower their prices.
Ofgem continued that if EDF is able to absorb some of the impact of price increases, and asked why other energy companies canít do the same, and went on to say they probably could, and mentioned that in a competitive environment you would think that these companies would be doing their best to win customers business.
Ed Davey, said that he would be calling on consumers to show that they were trying to keep costs down, and pledged support that the regulator would help force the companies to show more transparency.
The four energy companies who have already increased their prices have blamed these increases on the wholesale price of energy and costs of the governments social and environmental schemes, and also placed some blame on maintenance of networks which delivers power to homes.
In a marked contrast EDF said that costs for wholesale energy will add 0.1% on customersí bills whereas Centrica the parent company of British Gas, said that costs increases for wholesale will add 3% to customersí bills and SSE has state that it will add 4% to their customersí bills.
An analysis at Energy Consultancy Inenco, Matt Osborne said that the big difference was that EDF was not blaming energy prices on the wholesale price increases whereas the others have not been buying on the wholesale markets in an effective and efficient manner compared to EDF.
The only energy company of the Big Six, E.ON declined to comment whether they will be increasing their prices.
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