UK NEWS

POWER BILLS ARE SET TO SOAR TO £2,000 A YEAR

Power blackouts and household energy bills rocketing due to crisis over supplies

Saturday October 10,2009

By Louise Barnett

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BRITAIN faces a nightmare scenario of power blackouts and household energy bills rocketing to £2,000 a year due to a crisis over supplies.

The bleakest forecast from energy regulator Ofgem predicts a crippling 60 per cent leap in fuel bills by 2016 because of global energy shortages and soaring prices.

That would see the average home’s annual fuel bill leap by £760 from the current £1,239.

Ofgem confirmed yesterday there is no chance of bills falling despite price cuts in the wholesale energy market. Only a £200billion investment drive over the next decade will stave off this worst-case scenario, according to the regulator’s Project Discovery report.

Even Ofgem’s most optimistic scenario still sees household bills surging 14 per cent by 2020, equal to an extra £173 a year for every home. Customers are already paying 36 per cent more for household gas and electricity than at the start of 2008.

Robert Hammond, of watchdog Consumer Focus, said: “These scenarios range from the bleak to the stuff of nightmares.”

Dr Fiona Cochrane, of consumer magazine Which?, blamed a Government failure to address the energy supply problem sooner.

Ofgem’s worst fears see a perfect storm created by the UK’s ageing energy infrastructure and increased dependence on imported gas coinciding with rocketing wholesale energy costs. A lack of gas storage makes Britain vulnerable to price hikes when global demand surges after the recession.

This coincides with the Government missing its carbon reduction targets and incurring large financial penalties from Europe.

Its dire predictions come as energy giant Scottish & Southern prepares to reveal a leap in half-year profits which could even double from its £302million total for the same period of last year.

British Gas, the UK’s biggest supplier, saw its residential profit soar by 80 per cent to £299million in the first six months of this year. Its full-year profit is expected to hit the £500million mark.

Andrew Harrop, of Help the Aged, said bills had more than doubled since 2003. He added: “The steep increase in prices is frightening for many older people on low incomes who spent last winter in cold homes cutting back on gas and electricity to make ends meet.”

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WHY DOESN'T THE REGULATOR REGULATE?

10.10.09, 11:22am

Ofgem, a complete waste of time and money.
They're supposed to be a REGULATOR, and all they come up with is predictions of crippling increases to bills, thanks for that. Increases will happen with or without Ofgem. Its just cushy well paid jobs for the boys, disband them and put the money saved towards paying off our debt.

• Posted by: David16 • Report Comment

OFGEM THE REGULATOR????

10.10.09, 9:46am

This "so-called" energy regulator has NO powers to bring energy suppliers into line. It is a complete and utter waste of tax payers money, with the top people receiving six figure salaries! For doing what? NOTHING!

• Posted by: RichardMac • Report Comment