British Gas Price changes

Centrica PLC 9 February 2001 9th February 2001 Centrica plc- British Gas price changes Centrica plc confirms that British Gas has today announced an increase in prices for all domestic gas customers from 1 April and indicated that further changes are extremely unlikely this year. At the same time it will cut domestic electricity prices for customers in England and Wales. The increase, averaging 4.7 per cent, is largely in line with those already announced by other major suppliers, and results from the significant escalation in gas costs affecting the whole industry. The British Gas price rise will add £14 to the average annual bill for mains gas customers, which equates to less than 27 pence per week. It will be applied from April so will not affect winter bills. The announcement was accompanied by news of an average reduction of 3.7 per cent in electricity prices from 1 April. More than 3.5 million customers who take electricity from British Gas in England and Wales will see an annual reduction of £9 in their bills. The great majority of these are customers who buy both fuels from British Gas and who will therefore see an average increase of only £5 a year in their overall energy bill. The cut reflects the fact that electricity wholesale prices have already fallen in anticipation of new electricity trading arrangements, NETA, which are to be introduced shortly in England and Wales. Electricity prices will not change in Scotland. For more than two years customers have, on average, enjoyed greater savings than in England and Wales as a result of supply contracts negotiated under different trading arrangements there. Mike Alexander, Managing Director of British Gas Trading, said: 'We wanted to act now to reassure customers who have been concerned by the recent speculation about high price rises as a result of increased gas costs. Not only is the increase much lower than many predicted but it is extremely unlikely there will be any further change this year. 'We have worked hard to protect customers from the volatility of the current gas market and customers can be assured that we remain committed to pricing competitively and providing value for money. Our track record is evidence of this and shows a reduction in gas bills of nearly 20 per cent in real terms over the past five years.' Enquiries: Centrica Media Relations 01753 758445 Centrica Investor Relations 01753 758114 Notes 1. British Gas Trading supplies 14 million gas and 4 million electricity customers through its British Gas and Scottish Gas brands. 2. The gas price increase applies to domestic mains customers in England, Scotland and Wales and will apply to gas used from 1 April. The £14 average annual increase in gas bills is based on a consumption of 19,050 kWh and includes VAT. 3. Gas Prepayment and cash/cheque customers see the smallest percentage increase - 4.4%. Prices for Direct Debit and Prompt Pay customers will go up by 4.9% and 4.8% respectively. This is based on a consumption of 19,050 kWh and includes VAT. 4. Over the past five years British Gas customers have seen gas bill reductions (excluding VAT) of nearly 20 per cent in real terms. Despite inflation, the average annual bill has fallen from £315 in February 1996 to £ 290 in February 2001. 5. The electricity price decrease applies to domestic electricity customers in England and Wales and will apply to electricity used from 1 April. The average annual bill for customers using electricity only is reduced by £9, based on a consumption of 3,300 kWh, including VAT. 6. Savings in Scotland refer to comparisons with local PES prices. 7. Prepayment and cash/cheque customers buying electricity only will see a reduction of 3.6% and Direct Debit bills will fall by 3.8%, based on a consumption of 3,300 kWh, including VAT. 8. The new electricity trading arrangements, NETA, are due to be introduced on 27 March, subject to the final stages of testing. Electricity prices have already fallen in anticipation of the new arrangements. 9. British Gas remains committed to supporting the fuel poor. Last week, British Gas announced an innovative Household Bill Paying Account in conjunction with the Bank of Scotland aimed at providing basic banking facilities to those who currently have no bank account. This will be available later in the year and will enable more customers than ever to take advantage of direct debit discounts for their fuel. 10. This new service is being promoted alongside Warm-a-Life, British Gas's scheme which aims to provide the fuel poor with energy efficiency measures in their homes to cut bills, and a 'benefits healthcheck' to ensure that customers are claiming the Government benefits they are entitled to. Pilot results from the free healthcheck show eligible customers can boost their annual benefits by an average of £1,000. 11. Ofgem will shortly publish its final proposals on British Gas Trading's price controls. These price changes are subject to Ofgem's final decision. Ends

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