Powergen announces price rises

Energy supplier Powergen has announced that it is to increase gas and electricity prices this year.

The increases, which will come into effect from March 10, will electricity prices rise by 18.4% and gas prices increase by 24.4%.

Rising wholesale gas costs have been blamed for the price hikes. Powergen said that the cost of gas had increased by 70% since last January.

The increases will see the average bill for electricity customers increase by £56 per year, while gas customers will face a rise of £107 per year.

Powergen spokesperson Nick Horler said: "We know that what matters to our customers is the impact this increase will have on their pockets, but we, like all energy suppliers, continue to face unprecedented pressures from wholesale costs.

"We shielded out customers from the impact of these costs for as long as possible and we continue to ensure that our prices are highly competitive.

"I can assure all of out customers that we take our responsibilities as one of the UK's leading energy suppliers very seriously, which is why we've also made extensive support available.

"In addition, we'll be investing billions of pounds in the UK over the coming years to help ensure that people's lights stay on and that their homes remain warm."

Powergen outlined plans of the £100 million it intends to spend to protect the most vulnerable customers over the next three years. The money will help to improve the energy efficiency and income of half a million homes currently in, or at risk of, fuel poverty.

The company has also launched a capped product, which will enable customers to freeze prices until 2010.

However, watchdog Energywatch said that the price rises were "appalling".

Powergen's announcement follows British Gas's decision to increase prices by 22%, announced last week.

(KMcA/GB)