With power prices like these, even Sid would switch

Customers of British Gas are about to suffer yet another hike in their bills. But it's easy to change supplier, says Melanie Bien

If ever there was a good time to switch fuel supplier, this is it. British Gas customers will pay, on average, an extra £58 a year for gas per household and £25 for electricity from 20 September, after the supplier last week announ- ced its second price hike this year.

This works out at a 12.4 per cent rise in gas and 9.4 per cent in electricity and is the company's fifth price increase since June 2000.

But the average British Gas customer could save up to £110 a year on their gas bill, £45 on electricity and £127 on dual fuel by moving to the best rival deal, says The Energy Shop, a price comparison and switching service. That's because the latest hike has plunged the company way down the pricing league table.

"The UK energy industry has never faced such high wholesale gas prices," says Mark Clare, managing director of British Gas, explaining its decision. "Looking forward, the price for 2005 is more than 50 per cent up on 2003. We have absorbed as much of these additional costs as we could, but unfortunately we now have to pass a proportion of them on to our customers."

But some in the industry believe the company has gone too far. "This represents the highest across-the-board price rise in the industry since competition was introduced [in 1997-98]," says Tim Wolfenden, product manager at uSwitch.com, a comparison and switching service. "British Gas may well have overestimated the strength of its customers' loyalty. Faced with the second significant rise in less than a year, customers are likely to vote with their feet."

The 18.5 million customers of British Gas aren't the only ones who could save by switching; other suppliers are also increasing their tariffs. EDF Energy's latest rise comes into effect on 3 September - 3.5 per cent in gas and 3.8 per cent in electricity. When combined with price hikes earlier this year, that's a total of 10.5 per cent for electricity and 8.1 per cent for gas. Powergen has also increased prices twice this year. Its latest rise comes into effect on 6 September.

However, given that switching is a quick and simple process, there's no need to put up with soaring fuel prices.

"This latest increase is a real sting in the tail for consumers - and far outstrips that of any other energy company," says Alistair Tillen, chief executive of SimplySwitch, another comparison and switching service. "Consumers would not stand for this level of increase from their phone or mortgage provider, and we hope that British Gas customers seriously look for the better-value alternatives that are readily available."

Switching takes very little effort, though avoid salespeople who come to your door or stop you in the street. Instead, log on to one of the price-comparison websites listed below or call the freephone numbers.

If you apply online, you will be asked to type in your postcode, your current gas and electricity suppliers and the amount you are paying. The site will generate a list of the cheapest suppliers in your area and the savings you can make by switching.

Uswitch.com also provides a service rating so you can see how other customers rated the supplier. And you can search for "green" fuel suppliers if you are keen to help the environment.

Once you have chosen a new company, you will be asked to type in your name, address and contact numbers. The comparison website then gets in touch with the new supplier, providing it with your details.

That company then writes to you to confirm the switch and contacts your existing supplier to inform it that you are moving. You will also be required to take a meter reading on the last day that you are with your old supplier for the final bill to be worked out.

Within a few weeks, the switch should be completed.

Contacts: The Energy Shop, www.theenergyshop.com; SimplySwitch, 0800 781 1212 or www.simplyswitch.com; Uswitch, 0800 093 0607 or www.uswitch.com

CUT THE COSTS

¿ Shop around for the cheapest supplier in your area, using one of the comparison websites.

¿ Pay your bill monthly by direct debit. This can save you £180 a year, estimates The Energy Shop.

¿ Read your meter. Suppliers often use estimates, and if you are paying by monthly direct debit, you may be paying over the odds. Check regularly and get your payments adjusted accordingly if need be.

¿ Buy gas and electricity from the same supplier - you get a discount for dual fuel.