Power companies accused of 'cashing in' on £9bn windfall as bills are set to rocket b

[Legal Beagles]

Consumers will be warned today of sharp increases in energy bills. Bills could rocket by up to 40 per cent, it is claimed. Meanwhile, power companies creamed off £9bn from a carbon scheme.

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Re: Power companies accused of 'cashing in' on £9bn windfall as bills are set to rock

Consumers will be warned today of sharp increases in energy bills that could add £400 to an average family's annual costs.

A rise in tariffs of up to 40 per cent is expected to be signalled when British Gas's parent company, Centrica, issues a trading statement to the City.

Analysts believe that British Gas may need to push up prices by 30 per cent before Christmas.

Some are forecasting the industry will force through a rise of 40 per cent over the next 12 months.

The first of several price increases could be announced within a matter of weeks, analysts say.

Centrica recently issued a veiled warning on prices when it pledged to take 'necessary action' to protect its profit margins from soaring wholesale gas prices.

The industry's costs have rocketed because the wholesale price of gas is linked to that of oil, which has risen to
more than $130 a barrel in recent weeks.

The price of wholesale gas for delivery this winter passed the £1 a therm mark for the first time last week and has more than doubled compared with a year ago.

Analysts at Cazenove have forecast that British Gas, which supplies energy to 16million customers, will have to put up tariffs by 30 per cent in the next six monthsThe current dual fuel household bill for gas and electricity is around £980 a year, however this seems likely to climb to around £1,400.

The warning comes as families struggle to cope with large increases in the cost of living.

The Daily Mail Cost of Living Index shows food prices are rising by 19.8 per cent a year.

The forecast bill increases emerged as a row broke out in the House of Commons over power companies' threatened price rises despite a £9billion windfall.

Liberal Democrat leader Nick Clegg said the industry has cashed in on a scheme to reduce carbon pollution.

The EU's Emissions Trading Scheme gave permits to power generators and others to allow them to emit certain levels of greenhouse gas each year.

Companies that reduced their emissions to below the permitted level were able to sell their unused allocation.

It has emerged, however, that power companies in the UK and Europe, including
Centrica, were handed very large carbon allocations that allowed them to sell unused portions at a vast profit.

Separately, these companies used the introduction of the ETS system as an excuse to increase electricity bills.