Yahoo Finance Energy Bills: EDF Confirms 3.9% Average Rise
EDF Energy is to raise its average gas and electricity bills by 3.9% from January 3 - a lower increase than its rivals - in a move that raises pressure on the Government to help bring down household costs.
The company - the fifth of the so-called Big Six firms to announce a winter increase - said its decision was conditional on David Cameron delivering on his pledge to "roll back" so-called green levies.
EDF claimed that as a result of this decision, its rise was less than half the size of those announced by British Gas, SSE (LSE: SSE.L - news) , Scottish Power and npower to date and meant its new standard variable tariff would rise by just £49 on average.
Some 2.4 million of its household customers will be affected as around a third are on fixed-tariff deals.
Only E.ON is yet to confirm a rise among the major players but reports suggest it is planning to announce later this month an average increase of 6.6% from early 2014.
The company said its limited increase was based on a decision to hold back rising costs - including those from the Government's ECO social and environmental scheme - for now pending a decision on their future expected in the Autumn Statement on December 5 .
The firm said: "The company has taken action ahead of the outcome of the Government's review of the costs of ECO and other schemes.
"If the Government makes bigger changes to the costs of its social and environmental schemes than EDF Energy has anticipated, the company pledges to pass these savings onto customers.
"However, if changes to social and environmental programmes are less than anticipated, the company may have to review its standard variable prices again."
Ministers are examining whether the bulk of the costs - expected to amount to £158 annually for the average dual fuel customer next year - should be taken out of bills and placed under general taxation instead to help bring down bills.
EDF (Paris: FR0010242511 - news) 's chief executive Vincent de Rivaz said the industry must "challenge the cost and affordability" of Government green schemes.
He added: "I know that price rises are always unwelcome, but we have taken the first step to show what can be done if rising costs are tackled head-on."
Consumer groups gave a cautious reaction to the move.
Tom Lyon, energy expert at uSwitch.com, said: "Any winter price rise is a blow to consumers as it makes the struggle to afford to stay warm that little bit harder.
"However, EDF Energy is to be applauded for the stance it is taking by factoring in the potential reduction on green levies into its calculations.
"This means that customers will know up front that they will benefit from any step the Government takes to reduce the impact of 'hidden' taxes on bills.
"More importantly it also challenges the Government to put its money where its mouth is and to make good its pledges on affordability."
EDF said its decision meant it would be more difficult for its residential supply business to be profitable next year, but the company believed it was important to limit price increases for hard-pressed customers.
News (Other OTC: NWSAL - news) of the increase came amid a furious debate on energy pricing - prompted by Labour's pledge to freeze bills for 20 months if it wins the 2015 general election.
Ministers are keen to promote greater competition - and the value of switching suppliers - while the Energy Secretary Ed Davey has warned that customers are not "cash cows" to be squeezed for profits by the shareholders of energy companies .
Sky's City Editor Mark Kleinman learned on Monday that the industry was mounting a fightback under the growing pressure from politicians, with a report demonstrating its value to the UK economy.
The study suggested it contributed more than £100bn in total last year.
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