For many homeowners this month is about to begin with price hikes expected from all main gas and electricity suppliers. However, as wholesale energy costs have been falling for the last six months we would have expected consumers to benefit from a reduction in their bills.

There are several reasons for the price hike; firstly six capped rates are coming to an end over the next four months. The first actually took place on new years day as Scottish & Southern Energy put up their rates by 12.2%. Similarly Powergen and Scottish power will also be increasing their rates over the next month.

British Gas will also be putting up their rates for its online ‘Click Energy Tariff’ by 12.5% for gas and 9.5% for electricity, despite introducing a price freeze in autumn 2007 and promising lower prices in the spring.

When this competitive rate comes to an end, customers will automatically be transferred onot an alternative plan by their supplier, leaving customers in for a price shock when they receive their first quarterly bill.

Gas and electricity customers will face another increase after the regular Ofgem announce a £5 billion investment programme to upgrade Britain’s energy networks.

Ofgem’s proposals for the national gas distribution networks may mean up to £946 million could be invested to improve networks across Britain and to tackle pension liabilities. Consequently this would result in an average household bills rising by as much as £14 per annum. Since January 2007 households have already seen bills increase by 40% for gas and 25% for electricity.

Pipelines are being built across the country to distribute the natural being imported from Norway’s Ormen lang and Zeeburgge. Iron mains within 30 metres of premises are also being replaced as part of the investment programme.

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