Within days of SSE, one of the largest utility companies in the UK, raising its energy prices by 8.2%, Ed Davey, the Energy Secretary warned that Government ministers could not prevent gas and electricity prices from rising. Although Ed Milliband promised that if Labour won the next General Election he would freeze energy prices for 20 months, ED Davey replied by claiming that it would be impossible because the costs that make up over half of everyone’s energy bill were beyond his control. These included the wholesale cost of gas on international markets and green levies applied to energy bills which were protected by legislation. He added that the costs of replacing aging power networks were also adding to the problem and “those are costs which are impossible to avoid”.
SSE has decided to raise its prices by an average of 8.2% from November which will increase their dual-fuel energy bills by just over £100 to £1,380 per year. Other companies are expected to follow suit with their own prices increases before the winter. Some commentators are claiming that the increases in energy bills are a pre-emptive strike to establish energy prices at a higher level before a potential freeze is announced, if Ed Milliband’s Labour party wins the next election.
Green levies on household energy bills now account for around 9% or £110 of the average fuel bill but Ed Davey defended them because most of that amount funded social programmes designed to tackle fuel poverty, rather than pay for the development of green energy sources. Social programmes such as the Energy Company Obligation (ECO) which includes the Affordable Warmth Obligation, help pensioners and other low income households with their fuel bills and to improve the energy efficiency of their homes. ECO, which is the most expensive of all the green levies, was introduced in January to provide funding to insulate homes and replace inefficient gas central heating boilers for private householders who receive Pension Credit, Working Tax Credit, Child Tax Credit or one of the Income-Related State Benefits. The Energy Secretary suggested that rather than cutting the green levies “we need to do ever more to help people, particularly vulnerable people, people suffering from fuel poverty”.
The Government has a legal obligation to try to wipe out fuel poverty by 2016 and the Affordable Warmth Scheme, part of ECO, is currently scheduled to run until March 2015. If you feel that you may qualify for a free energy efficient gas central heating boiler funded by the ECO Affordable Warmth Scheme, complete the online application form on this website.