EDF becomes first major energy firm to hike prices
EDF is raising prices by the maximum allowed under the new price cap, impacting about two million domestic energy customers.
Customers on EDF’s standard variable tariff paying by direct debit will see their dual-fuel bill increase by 54% to an average of £1,971.
However, customers that use more than the typical amount of energy will pay more than this. This is because the price cap effectively caps the cost per unit of energy, not the total bill.
Energy regulator Ofgem announced last week that the energy price cap will rise from £1,277 to £1,971 from 1 April. The price hike will affect 22 million customers and Ofgem said the increase is driven by a record rise in global gas prices over the past six months, with wholesale prices quadrupling in the past year.
EDF said it wanted to be “fully transparent” and give customers as much notice as possible about the price rise. It will be writing to all its customers on standard variable tariffs in the coming weeks to explain how the changes will affect their bills.
Philippe Commaret, managing director of customers at EDF, said: “We know that these changes, driven by global gas prices, will not be welcome news for customers, but we want to be fully transparent and give our customers as much notice as possible. We’ve never stopped offering our customers help and will continue to do so, although the scale of the global problem means we are constrained in how much we can do.
“It is good to see government acting now to take some of the sting from the forthcoming rise in April, although we know many customers will continue to struggle. We will work with government to implement the schemes in the best way possible for customers.”
Other energy suppliers are also expected to raise prices on their default tariffs to the price cap level in due course.
The government is giving consumers a £200 rebate on their energy bill later this year. But this will be clawed back at £40 a year for five years starting in 2023. However, the scheme has been heavily criticised for being overly complicated and not offering targeted support.
Research commissioned by MoneySavingExpert.com shows the majority of British adults would opt out of the scheme, if given the choice.
More than half (57%) of those responsible for energy bills who took part in a nationally representative poll of 1,665 adults for the website said they would decline the cash for the scheme the chancellor calls an ‘energy rebate’, but has been dubbed the ‘loan-not-loan’ scheme by MSE founder Martin Lewis.
The survey findings show in every single category of age and income – including those receiving benefits – the majority would opt out. Just a quarter (26%) said they would actively opt into the scheme if they had the choice.