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Energy bills set to rise before Christmas?

Bills could go up as much as £65

Bills could go up as much as £65 it was estimated today as worries about bill prices this winter continue to rise. 

The news that experts are predicting a rise of as much as £65 follows Ed Miliband’s accusation that energy suppliers have been ‘ripping off’ their customers.

Now that the summer is over and customers are starting to use heating systems again, there has been concern about energy costs and whether they are likely to rise as winter approaches.

It began with SSE, which last month announced that the typical duel fuel bill would go up by nine per cent for both gas and electricity on October 15 – increasing the average SSE bill from £1,235  to 1,354 a year.

Five million households are expected to be affected by the announcement from SSE, but more of the Big Six energy suppliers could still follow suit.

The news is likely to fuel more criticism about the energy industry, which has been accused of lacking transparency around pricing.

Common misconceptions about the energy industry

However, Angela Knight, chief executive of trade body Energy UK, has come out in defence of the companies in online magazine Business Green, saying that they are aware of the worries their customers have with regard to rising energy bills.

She said that the industry is trying to demonstrate how it delivers value for money, but must also do more to improve its reputation.

Here are some of her key points. Tell what you think in the comment section below:

· Energy suppliers make big profits

Ms Knight says that this is simply not the case; Ofgem has calculated that the profit after tax on a £1,300 dual fuel bill is £45 a year, or £4 a month.

She states that this is fair and important, as companies need to make a profit in order to employ staff and make investments.

· Energy bills rise year-on-year

Energy prices both rise and fall and the misconception that they rise more quickly than they fall is unproven, says Ms Knight.

She said that the determining factor at present is the rising cost of fossil fuels, which in term makes wholesale prices more expensive.

Add to this the cost in renewing network infrastructure and social and environmental costs due to the UK moving towards a low carbon economy and the price starts to mount.

· An energy bill is just for gas and electricity

Only half of the average household energy bill is for gas and electricity with the rest going to pay for other aspects of the process, such as those mentioned above and taxes. (See where the money in your energy bill goes to in our utility bills guide.

· Energy is more expensive than in other European countries

Energy bills in Britain were less than 11 other countries in Europe when they were analysed last year.

These countries include Germany, Italy and Spain.

· Energy companies don’t like green energy generation

Ms Knight explained that the energy industry recognises the economic benefits of generating energy through green methods but some of the technologies being developed are expensive, but companies are helping to fund these.

· Energy firms want customers to use more gas and electricity

A large number of energy companies are helping households up and down the country use less energy by making simple home improvements.

These include loft and cavity wall insulation, which many companies are offering for free along with the warm home discount and home heat helpline.

Ms Knight summarised: “So the time is surely past for allegations, assertions and criticisms. We agree that people need to know that their energy costs are fair.”

Do you agree? Let us know below!

Learn more

Energy price changes – what suppliers went up and who went down.