Energy firms get chilly reception to price rises

Stephan Shakespeare
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PUBLIC perception of the large energy providers has dived after November saw steep price hikes that will see households face near-record gas and electricity bills this winter, despite the fact that wholesale prices, at 1.7p a kilowatt-hour (kWh), are only half the level of 2008 when they reached 3.2p/kWh, and profits are healthy.

On 12 November, British Gas surprised the energy sector by announcing it will increase gas and electricity prices by an average of seven per cent, with many customers facing as much as a 10 per cent rise. This follows news from Scottish & Southern Energy that it will raise prices by 9.4 per cent. Similar raises are expected from Scottish power and npower.

These actions have not gone unnoticed. YouGov’s BrandIndex “Buzz” score, which charts the immediate balance of positive and negative sentiments among the population, registered significant drops for each of the big five energy companies during November – -14.4 for SSE, -18.8 for Scottish Power, -5.5 for npower.

British Gas though took the greatest hit with its “Buzz” score dropping to a low of -43.2 on 19 November before recovering to -34.8 by the end of the month. This perhaps reflects the double hit of raising their prices whilst at the same time announcing significant profits. Centrica, which operates British Gas, told City analysts just over a week after the increases were announced that its profits were likely to be above expectations, hitting £2.2bn. Only one company, EDF Energy, has pledged to freeze bills over the winter. But though its “Buzz” score rose briefly to a high of 0.3 on the 12 November it has ended the month with an overall drop of -7.1.

Stephan Shakespeare is founder and chief executive of YouGov.