Powergen hikes bills by 20%

THOUSANDS of consumers could see their energy bills rocket following the takeover of supplier Amerada by energy giant Powergen.

An estimated 100,000 online customers are expected to be affected by the change, which could add nearly 20% to an annual bill, or more than £100 a year.

Powergen, which is the UK's largest energy supplier, has written to online Amerada customers, informing them of the takeover and giving details of the new tariffs. Customers will have a 21-day notice period after receiving the letter, before the new charges are introduced.

Electricity customers who have online accounts will see their bills increase by between 4.5% and 12% depending on the method of payment used.

Paying the bill by direct debit will result in a larger increase than if you pay by a quarterly cash cheque. But customers who pay by Economy 7 could see their bills fall by between 0.5% and 6% say Powergen.

Most gas customers are likely to see annual bills rise by between 10% and 17%, though in some cases costs may rise by more than 20%. Powergen also imposes a quarterly standing charge, unlike Amerada‘s daily rate, which is more expensive for customers.

Powergen has come under criticism for failing to spell out, in letters sent to customers, the hefty increase in their annual bills that many will face once the notice period has ended.

Consumer advice service Simply Energy has hit out at Powergen, for 'failing to make it clear to customers what to expect'. Karen Darby, chief executive of Simply Energy said: 'We are concerned consumers may feel this is being presented as a fait accompli. Just because an energy company is being taken over it does not mean to say customers have to accept a price hike.'

Powergen spokesman Nick Lakin defended the changes, which he said will affect only a small proportion of Amerada‘s existing 400,000 customers.

'Amerada historically has a poor record of customer service and high levels of customer complaints. We are moving Amerada customers to Powergen‘s systems, which will ensure we can provide a better standard of customer service than they have been receiving. In some cases this will also result in an increase in annual bills.'

Customers could reduce the rise in their annual bills by opting instead for the duel fuel package where Powergen provides both gas and electricity, said Larkin. The average increase for online customers on this plan is between 6% and 12%.

Alternatively visit the Money Shop for help on cutting your gas and electricity bills.