First Utility, the largest independent energy supplier in the UK, has raised the price of its standard variable tariff by 9.7 per cent.
This will result in an additional cost of £8.80 a month, though First Utility stressed that only 13 per cent of its 900,000 customers will be effected.
The independent supplier said its hand had been forced by significant increases in the cost of energy supply. In a statement release today (24 February) it said that “the costs of buying energy and meeting policy-cost obligations such as the smart meter programme has increased by 22 per cent” compared to last year.”
The company concluded: “While the company will absorb a sizeable proportion of these costs, First Utility will reluctantly have to pass some on to customers.”
Ed Kamm, managing director of First Utility added: “After a period of low wholesale prices, energy and industry policy costs have increased quite substantially over the past year and that unfortunately means we need to reflect this in the price of our variable tariff.
“This will only impact a small proportion of our customers thanks to our focus on providing customers with great value fixed-price tariffs.”
First Utility issued a breakdown of its external cost pressures which showed wholesale gas and electricity prices – which make up 40 per cent of a customer’s bill – had increased by 42 per cent year on year.
It also highlighted that the cost of rolling out smart meters – 7 per cent of the bill – have risen by 51 per cent year on year.
Network costs – 26 per cent of the bill – were the only element of the supply cost base to have decline n the past year. They have fallen 4 per cent.
First Utility said it has absorbed 12.3 per cent of the increased costs to supply.