Power bills set to soar by 15%

HOUSEHOLDS and businesses were warned yesterday to prepare for steep rises in gas and electricity bills. Experts believe they will soar by 15% for homes and 30% for industry.

That would take the average household electricity bill from £250 to as much as £288 while gas prices would rise from £330 to £379.

The reason for the increases is an expected jump of 40% in wholesale energy prices next year.

This is largely due to the higher cost of gas, which is used to generate half the nation's electricity. Britain is having to import more gas from abroad.

A crackdown on emissions of carbon dioxide to be introduced next year and a series of other green initiatives will push up prices. Coal-fired plants must be cleaned up or replaced with cleaner gas-fuelled plants.

Consumer groups condemned the prospect of rises which would particularly hit the vulnerable, including pensioners.

At the same time, rising energy costs will have a dramatic impact on businesses, particularly heavy electricity users such as manufacturers.

Powergen predicted in May that electricity bills will have to rise by 20% on top of inflation in the next six years to update the ageing network.

A spokesman for the company, which has 9m customers, said: 'There are a lot of pressures facing the whole industry. We would expect prices to go up in the coming years. To keep bills down households should consider energy efficient measures.'