In a shock annocement yesterday, EDF revealed it will be raising energy prices for the second time this year.
The utilities giant, which is 85% owned by the French state, says it is left with no option but to pass on rising costs to its 1.5 million standard dual fuel customers. Those households will see annual bills rising by almost £80.
There is a concern that EDF's move could trigger a rash of similar hikes from the other 'Big Six' energy suppliers, who tend to increase prices in similar times.
Households should switch to a cheaper energy deal now or risk significantly higher bills in the near future
What exactly is changing?
Starting from June 21, EDF’s standard variable, dual fuel, direct debit customers will see their bills rise by 7.2% on average.
Broken down, this works out to a 9% hike for electricity and a 5.5% gas price hike, leaving the average customer £78 worse off come the summer.
The increase will be particularly hard to swallow given the energy giant already hiked prices last month.
Why are energy prices rising?
EDF claims it has no choice but to pass on the increased costs facing all energy suppliers, namely higher wholesale prices and government initiatives like installing smart meters in homes.
Vincent de Rivaz, the CEO of EDF, added: “I know that price rises are never welcome, but the industry is facing significant cost increases.
“To be a sustainable and responsible business, we aim to make a fair margin in supplying customers.
“This fair margin allows us to invest for the long term, in particular in good service, innovation and smart metering. It also allows us to help more customers choose the right tariff for them.
“We have cut all the costs under our control without compromising our customer service.”
I’m not an EDF customer, should I be worried?
It’s not just the 1.5 million EDF customers who could face higher bills, as energy firms tend to hike prices in tandem.
As a case in point, since EDF imposed its first hike in March, two of the Big Six have already followed suit and two more have hikes planned for later this month.
British Gas was the only one of the Big Six not to budge, and that’s because it pledged last year not to hike prices until August.
Announcing a second round of hikes is rare, but if one firm is happy to risk the public anger there’s every chance others could follow suit and make for a miserable summer.
What can you do about rising energy costs?
Thankfully, you can easily ensure you not only beat the hikes, but actually reduce your bills by switching to a cheaper deal.
Government stats show the average user saves around £200 on average by taking a few minutes to switch deals.