Customers, News

Council-owned supplier blames rising wholesale energy costs

Robin Hood Energy will hike the price of its Evergreen standard variable tariff by 17 per cent for the average dual fuel customer starting on 22 April.

The not-for-profit supplier, which was formed by Nottingham City Council in 2015 in an effort to tackle fuel poverty among its residents, blamed the increase on rising wholesale energy prices.

“Since 2016 the price of wholesale energy purchase has gone up significantly and this affects our ability to keep prices as low as we’d like them to be,” the company said in a statement. “The price increases… have been kept as low as possible to minimise the impact they have on our customers.”

Chief executive Gail Scholes said: “Robin Hood Energy is committed to supporting its customers throughout these changes and we will be contacting every customer affected to minimise the financial impact it has on them. We will be offering customers information about the cheapest tariffs available to them alongside any support they may need to switch.

“These price changes ensure that the company does not run at a loss but can still keep offering competitively priced energy to our customers who are at the heart of everything we do.”

The announcement follows a series of price rises from big six suppliers and smaller newcomers, including Eon, Npower, SSE and First Utility.

GB Energy Supply announced a 30 per cent price increase for its standard variable tariff customers in October, blaming its inability to hedge against rising wholesale energy costs, before going bust the following month. Its customers were taken on by Co-op Energy, which later announced its own price hike.

Consultancy firm Cornwall has warned that some smaller suppliers may not fully understand the commercial risks they are taking in undercutting their rivals with low-price fixed tariffs.

In February, Ofgem revealed it was looking at beefing up the financial stress tests for suppliers to ensure they are resilient to volatile market conditions.