EDF hikes prices by 3.9% and vows to go higher if green levies review falls short

EDF has become the fifth of the big six energy companies to announce an energy price hike. Although the lowest increase yet at 3.9%, the firm has said it will implement a further rise if the government’s review of environmental taxes is not sufficient.

The energy giant pledged to “pass […] savings onto customers” if the review was deemed adequate, but that it would have to put prices up even higher if it didn’t go far enough.

The announcement adds more salt to the wounds of customers who are set to face difficult economic periods this winter.

Energy secretary Ed Davey said, “Any price rise is disappointing but I’m encouraged that EDF have kept their price rise much closer to inflation than some of their competitors.

“The competition we’ve introduced to the energy market means people have a choice. They can look for the best deal available; including from smaller suppliers, with the confidence that switching will make an immediate difference to their bills and force the big six to compete on price.”

EDF is now the fifth of the big six energy companies to announce bill increases, after SSE, British Gas, Npower and Scottish Power hiked their prices last month. EDF’s increase remains the lowest, while at the other end of the scale, British Gas customers have been served with average increase of 10.4%.

Reg Platt, senior research fellow at the thinktank IPPR, said EDF’s position was “simply astonishing”.

“They have in effect issued a threat to government saying ‘cut back your policies or we’ll raise our prices further’. The policy they want to cut, ECO, provides households with insulation and efficient boilers to protect them against rising energy bills”, he added.

The announcement also comes the same day that energy secretary Ed Davey warned companies not to treat their customers like “cash cows”, saying that trust in the industry was at an all-time low. He even compared the “greed” of energy companies to that of bankers.

Labour leader Ed Miliband has promised to tackle rising energy bills by imposing a 20-month long freeze on energy bills for consumers, but this has been criticised by the coalition government, which said that the best way to act against hikes was for customers to switch providers.

Despite this, many high profile figures have blasted the energy companies’ decisions, including former Conservative prime minister John Major, who said that many will be left with a choice between heating and eating this winter.

Energy bosses were in the firing line of MPs last month when they appeared before a committee on energy and climate change. Labour MP Ian Lavery said there was “an opportunity to renationalise [the industry] because you cannot run the companies.”

Energy executives, however, blamed the rising costs on green levies, labeling them as a “regressive poll tax, effectively a stealth tax”.

Further reading:

Big six energy bosses grilled by MPs over price hikes

Ed Miliband’s pledge to freeze energy costs sparks intense debate 

Sir John Major: people shouldn’t have to choose between heating and eating

Which? calls on chancellor to cut big six energy companies ‘down to size’

Archbishop of Canterbury calls on energy firms to act generously