UK Gas price rise Shock !

Scottish & Southern Energy the UK's third largest gas supplier, pledged no further increases in 2006 when they raised energy prices twice this year. SS&E (which includes Scottish Hydro Electric) announced today that its 600,000 customers north of the Border would face increases of 12.2 per cent for gas and 9.4 per cent for electricity on New Year's Day.

Scottish Gas (part of British Gas AKA Centrica) simultaneously announced that they will be cutting prices for their 1 million gas customers and 1/2 Mn electricity customers in the spring - but provide no details ( delayed until spring says Times) . They are renowned as the most expensive energy suppliers North of the Border.

Centrica (who buy in 2/3 rds of the gas they supply) with 29,000 staff overall,(and approx 16 Mn. domestic consumers) has also announced 1,310 job cuts with the closing of their Stockley Park HQ in Middlesex - a response to the loss of 1 mn customers in 2006 throughout the UK after losing 670,000 gas customers in 2005.

Centrica claim British Gas had a 52 % share of the residential gas market and a 23 % of the household electricity market as of the end of June 2006 but has since seen it's domestic share drop to lower than 50%.

Centrica sees the Morecambe Bay gas field (pic) generate half the profits (£900 Mn) - expected to halve this year as the field is declining massively (15% in Q1 2006). The board has invested in North Sea exploration but the City patiently wait for a takeover at £4/5 a share (say £20Bn) from Norsk Hydro, Gaz de France or Lord Patel's friend at the gaming tables Vagit Alekperov and LUKoil. Goldman Sachs had them as a BUY (again) on Friday 15/12 @ 340p up from 250p over the year.

All this news of domestic energy prices follows the energy regulator Ofgem on December 4th authorising funding for more than £5 billion of investment in Britain’s gas and electricity transmission systems over the next five years which will allow energy suppliers to raise their prices to pay for new networks for LNG gas supplies and wind farms which have hitherto not been factored in to the costs of future energy supplies.

£1 Bn of this will be spent in the next 12 months by Scottish & Southern Energy, National Grid and United Utilities, to improve the gas network compared with a total of £864 million on improving their networks during the last five years. Much of this work is part of a 30 year plan to replaced ageing cast iron pipes.

This was explained by Ofgem as an agreement to increase overall transmission charges by 8% to consumers over 2006-2007 charges and 2% above inflation for each year thereafter, while gas transmission revenues will increase in line with inflation. The effect on domestic customers it was said will "be relatively small as transmission makes up only 3% of household energy bills." Ho.Ho.

Ofgem say that in the first three quarters of 2006, 2.9 Mn. customers switched gas suppliers, and 3.52 Mn. their electricity provider. Which keeps those busy bees drones in the call centres busy. (1,000 in British Gas in Cardiff alone)

This my child is all part of UK energy security.

Lord Patel's advice is buya forest, a wood stove and lay in some candles.