Power bills to soar again

Gas and electricity bills are set to rocket for the third time this year.

Britain's second biggest energy company said today it was raising its prices at the end of the month for six million customers.

Powergen's latest rise means its average customer will have seen bills go up by £133.40 by the end of the year, with total increases of 18.5 per cent for gas and 16.4 per cent for electricity.

The move was immediately condemned by consumer groups which warned that the poor and elderly faced a "miserable" winter.

German-owned Powergen said the new increases would put up gas prices by 9.6 per cent and electricity by 8.9 per cent. The announcement comes less than two months after its last gas price rise took effect and follows September's hefty increase in gas and electricity costs from British Gas.

Powergen, which supplies about one in five British households, including hundreds of thousands in and around London, said it was forced into the move by "unparalleled" increases in wholesale gas and power prices this year.

Over the past six months wholesale gas prices, which are linked to the oil price, have gone up by almost 50 per cent.

Nick Horler, managing director of Powergen Retail, said: "This price rise is not a step we've taken lightly. All suppliers are currently affected by rising wholesale costs and we've delayed this increase for our customers longer than most of our competitors." The company said it was also announcing an £8 million package of measures to give practical help to the most vulnerable. This includes free cavity wall insulation for all customers over 60.

However, consumer groups said many thousands of people would suffer. Allan Asher, chief executive of consumer group Energywatch, said: "This is another case of a power company upping its prices because of the high cost of gas in the wholesale market.

"It's going to be a miserable winter for hundreds of thousands of consumers thrown into fuel poverty."

The latest increase will bring Powergen into line with the rest of the "big six" energy suppliers. In April its electricity went up by 6 per cent and gas by 3.5 per cent. In September it said that gas would rise by another 3.1 per cent.

British Gas, the country's biggest energy supplier, announced rises of 12.4 per cent for gas and 9.4 per cent for electricity in September.

Neil Ranatunga, energy analyst at price comparison website uSwitch.com, said: "Powergen has gone for the softly, softly approach, rather than one large leap.

"This has done well to combat negative press coverage. However, today's price hike does bring them in line with record increases by the likes of British Gas and EDF Energy. It's imperative that customers shop around now. There are still good deals to be had."