Powergen increases energy prices

Consumer bodies have attacked the price increases

Energy company Powergen has said it is putting up its gas and electricity prices for the second time this year.

The company's domestic gas prices will go up by 18.4% and its electricity prices by 9.7% from 21 August.

It blamed the latest move on the rising wholesale cost of gas which it said had climbed 87% since the start of 2005.

The latest increases bring Powergen into line with the other major energy suppliers, who have all raised prices for a second time this year.

In March, Powergen increased its gas prices by 24.4% and its electricity prices by 18.4%.

"We take today's announcement very seriously and have fully considered its impact on our customers," said Nick Horler, managing director of Powergen's retail business.

Rises criticised

For consumers... this is further confirmation that they get the thin end of the wedge Adam Scorer, Energywatch

Consumer watchdog Energywatch attacked Powergen's decision to raise bills.

It said the latest rise would push up an average Powergen gas bill to £644 and electricity bill to £392.35.

That would mean the company's gas prices had risen by £333 (108%) since 2003 with electricity prices up by £151 (62%).

About 10% of the company's domestic customers will not feel the effect of the increases as they are on fixed or capped rate tariffs.

Powergen is owned by the German utility company Eon.

In its most recent financial results, Eon said its UK profits had fallen by more than a quarter despite its move to raise gas prices in March.

However, Adam Scorer of Energywatch said: "Powergen, like all suppliers, may struggle to sustain its profits as a UK retailer, but it has a strong electricity generation business and its parent company (Eon) enjoys bumper profits from the inflated wholesale price of gas.

"For consumers, whose bills have doubled in three years to an average over £1,000, this is further confirmation that they get the thin end of the wedge."