Families forced to sit in the dark and cold as energy bills QUADRUPLE

Households facing a new era of sky-high energy prices are seeing their bills quadruple overnight.

It has been three months since wholesale costs surged to a record high, plunging the energy market into chaos. A total of 29 firms have collapsed in the past year — that’s a third of the market. And analysts at comparison site Energyhelpline predict another six will fail within the next month.

The crisis has hit four million customers and left us all on the hook for a multi-billion-pound bill. As the chaos continues, billpayers are now reporting sudden and huge payment demands.

Households hit: The energy crisis has hit four million customers and left customers on the hook for a multi-billion pound bill

Money Mail this week discovered bills will be pushed up to cover a £155 million payout to energy giant E.on, after the supplier took on customers of four bust firms. It is claiming £625 for every new customer it has picked up, adding £6 to the average family’s annual bill.

Experts warn we could end up covering a £2.5 billion charge for similar payouts to other companies — adding around £100 to the average bill.

Jonathan Brearley, chief executive of energy regulator Ofgem, last night admitted Britain’s retail energy market was not ‘resilient enough’. The regulator is today expected to announce a series of new measures to ensure suppliers are capable of surviving a crisis.

Writer Jen Hyatt could not believe it when her 19-year-old daughter’s monthly bill increased more than four-fold, from £41 to £183. 

When she challenged it, SSE admitted Kate, who lives in a small two-bed flat in Dundee with a flatmate, had only used £37 of power the previous month.

Jen, 62, says: ‘SSE told me it needed to ensure it was covered in case wholesale energy prices increase — which is why Kate’s bill rose so much. 

‘But this is ridiculous. Why should anyone pay more for energy they are not using because a supplier is hedging its bets?’

The firm insists the new bill is correct and says the initial cost was based on an estimate.

Experts at Citizens Advice warned last week that the average energy bill could soar by another £614 next year — and this is just an average figure. Families living in larger homes and those with cheap deals due to end soon face even greater bill hikes.

With no competitive fixed deals left, households are in the unprecedented position where standard variable tariffs protected by the price cap are now their most affordable option

With no competitive fixed deals left, households are in the unprecedented position where standard variable tariffs protected by the price cap are now their most affordable option. But these still cost an average of £1,277 a year compared with around £900 for the best fixed deals a year ago.

And analysts predict the cap for the average household could rise as high as £1,891 in April.

Yet many customers, such as Kate, are already feeling the pain, with bills doubling, tripling or even quadrupling in recent weeks. 

Some have been switched to a more expensive deal with a new supplier after their firm went bust. Others say their provider has simply increased their monthly direct debits — even when they are in credit — without explaining why.

With living costs rising across the board and inflation set to exceed 5 pc, many have been forced to turn their heating down or even off. Families have told Money Mail they are sitting in the dark and have stopped using appliances such as tumble dryers and dishwashers.

Ash Scott, 36, says her energy bills have doubled since last year. Between October and December, she paid E.on £394 compared with £196 over the same period in 2020. 

While working from home in North Sheen, South-West London, she now tries to avoid turning the lights on for as long as possible.

E.on says Ash’s payments haven’t covered the amount of energy she uses, which is why it has had to increase the charges.

Last week, Citizens Advice slammed the energy regulator for failing to clamp down on unfit suppliers for nearly a decade and leaving the whole market vulnerable. 

The charity accused Ofgem of allowing financially unstable firms to be run out of owners’ kitchens and living rooms. And despite concerns, the watchdog scaled back the number of people working in its enforcement team by 25 per cent.

Safeguard: Analysts predict the energy price cap could rise to as high as £1,891 in April for the average household

The charity added that suppliers have held on to £1.4 billion of customer credit, with some households owed more than £1,000. Yet the average billpayer only needs £150 of surplus credit to cover typical winter usage, it said.

Louise Graham received a bill four times higher than normal after her energy provider found itself on the brink of administration. She signed up to Bulb in July when she moved to a two-bed property in East Sussex.

Louise, who lives alone, was paying around £57 a month. But after the supplier, which has 1.7 million customers, was put into special administration in November, she received a bill for £260, which it claimed covered her usage for the previous six weeks.

Louise, 37, says: ‘If the bill was reasonable we might trust it, but this seems too expensive even for a family, and I live alone.’

Bulb says the increase is likely to be a combination of Louise having electric heaters, which are expensive to run over the winter, as well as a possible fault with her old electricity meter which was removed in October.

Ofgem says it accepts the energy market needs reform and quickly, as it was not designed for this sort of extreme market event.

In the meantime, experts predict bills will stay high for at least the next 12 months, if not longer.

Tashema Jackson, from Energyhelpline, says: ‘Wholesale energy prices are sky-high at the moment, and for the past four months the price cap has kept most of those costs from being passed on to households.

‘However, we are entering a period of high prices, with bills likely to be twice as high as they were a year ago come April next year.’

Business owner Jo Smith, 46, says the rising cost of energy is eating into her family’s savings.

Jo and her partner Julian, 51, paid Scottish Power £309 a month for gas and electricity on their fixed deal which ended in April. They moved on to a standard variable tariff and saw their bill increase to £381 in September, before soaring to £478 in November.

To cut costs, the couple, who live with Jo’s daughter Jess, 17, have stopped using the tumble drier and no longer run the heating in the day. They are also careful about turning off lights and closing doors to keep in the warmth.

Jo, who runs a branding and business development company from her home in Sutton Coldfield, says she feels terrible when she asks her assistant to put on a jumper rather than turn on the heating.

She adds: ‘These extra costs have really put a strain on my family. Julian is having to eat into his savings to cover the bills.’

Scottish Power says the increase in Jo’s bill reflects both changes in her standard variable tariff, which rose in line with the price cap, as well as her usage. A spokesman says the firm will contact her.

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This post first appeared on Dailymail.co.uk