Energy bills to rise as winter looms

LONDON (Reuters) - Two of Britain's biggest energy suppliers are raising their prices just as millions of cash-strapped consumers switch on their central heating for the winter, saying higher costs made the move unavoidable.

The country's largest natural gas supplier British Gas, part of utility Centrica Plc, will charge 6 percent more for the energy it delivers, while rival RWE npower, part of Germany's RWE AG, will impose increases of 9.1 percent in electricity and 8.8 percent in gas.

SSE Plc, another rival, had already warned customers their bills will rise 9 percent from Monday.

"We know that household budgets are under pressure and this 1.50 pound per week rise will be unwelcome," said British Gas Managing Director Phil Bentley. "However, we simply cannot ignore the rising costs that are largely outside our control, but which make up most of the bill."

Both British Gas and RWE npower, whose increases take effect next month, said wholesale energy prices were a factor in raising retail prices, with Centrica adding it faced a decline in supplies it retrieves from the North Sea.

UK gas prices have risen 24 percent over the past two months and electricity prices have followed a similar trend, mainly due to jitters over imports from Norway and a lower supply of shipped liquefied gas.

UNAVOIDABLE COSTS

Costs to upgrade the energy network also made it more expensive for suppliers to deliver energy and spending on government schemes to reduce carbon emissions and improve energy efficiency are expected to double next year, the utilities said.

Last year, UK inflation was boosted to a three-year high mainly due to more expensive energy bills and the Bank of England predicted in August that suppliers would again lift prices towards the turn of the year.

Annual "dual fuel" bills for customers of British Gas will go up an average 80 pounds after November 16, while RWE npower customers will pay 109 pounds more on average from November 26.

"This is very unwelcome, and I know lots of families who are struggling to balance their budgets will be very disappointed and concerned by these price rises," said Britain's Energy and Climate Change Minister Greg Barker.

Barker said the government was rolling out policies to help reduce energy demand and support customers struggling to pay their bills.

The price announcements came a day after regulator Ofgem released a report showing that 3 percent of the UK population had gas and electricity debts last year.

The numbers were slightly down on 2010, but the report, published late on Thursday, said the average amount owed by individuals for gas bills rose by 10 percent to 371 pounds.

"There are signs that the recession and high energy bills are continuing to have an impact on consumers struggling to pay," Ofgem said.

Shares in Centrica were down 0.3 percent in afternoon trading on Friday, while shares in Frankfurt-listed RWE slipped 0.4 percent.

(Additional reporting by Susanna Twidale; Editing by Paul Sandle and David Holmes)

Source: http://news.yahoo.com/centricas-british-gas-raises-prices-6-percent-074309065--finance.html

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