Home fuel costs to rise by a quarter

Consumers can expect to see the price of domestic gas and electricity increase by as much as 25 per cent over the coming decade, power company bosses predict.

The rise – equivalent to 275 on top of the 1,100 average annual energy bill, at today's prices – will be driven not only by rises in wholesale prices but by volatile markets and the cost of investing in "green" energy, they told MPs.

Five of the big six power companies were quizzed by the Commons Energy Committee yesterday, and all agreed that prices rises were in the pipeline.

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British Gas managing director Phil Bentley told the committee that, looking forward to 2020, the regulator Ofgem had said it expected to see average energy bills up by 15 per cent to 25 per cent.

The committee heard that prices were also being driven up by non-energy costs – such as contributions towards the cost of energy efficiency measures. Alistair Philips-Davies of Scottish and Southern Energy said this added 20 per cent to bills since 2005.

He expected a 14 per cent to 15 per cent rise in non-energy costs up to 2015.

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