Energy bills: Changes on 1 January may cause confusion

Customers of all the major energy suppliers risk being left confused after being contacted about a price change starting on 1 January.

The biggest providers have all confirmed to the BBC that they are making changes to their prices at the start of the new year.

But the alterations are likely to only add pennies, not pounds, to bills.

The government says a typical annual bill will still be £2,500, but the maximum rates are being updated.

It will affect the 12 energy regions of Britain from the start of January and means suppliers are allowed to change their prices up to those new maximum levels.

Receiving news of a price change has worried many customers, at a time when prices have already increased dramatically and many find bills difficult to understand.

The government's Energy Price Guarantee means that the average customer on a standard variable tariff pays 34p per kilowatt hour (kWh) for electricity and 10.3p per kWh for gas. At those rates, a household with typical energy use will pay £2,500 a year.

However, the rates are only an average. There are different rates depending on which of the 12 regions of Britain you live in and how you pay your bills - by direct debit, from regular bills, or on a prepayment meter.

The government has updated the Energy Price Guarantee rates from 1 January, so companies have been allowed to make small price changes for almost every customer.

Generally, the changes are only fractions of a penny, so customers are being urged not to panic if they receive an email mentioning a new price. While for most it will only be tinkering round the edges, there are variations across Britain.

The biggest changes are for customers paying in monthly or quarterly bills for their energy. Prices are increasing in all of the 14 areas for both gas and electricity with the biggest changes being for those in North Wales and Merseyside, as well as in London, which are both increasing for electricity by more than 1p per kWh.

The billed rate in Merseyside will be the highest in Britain at 38.26p per kWh, more than 4p above the government's often quoted average rate of 34p.

Direct debit customers in Merseyside and North Wales will see the electricity unit rate they are allowed to be charged increased by 0.4p, while people in the northern area across the North East of England will see their electricity unit price go down by 0.4p.

Electricity rates have also been reduced in eight areas for prepayment customers. However, the biggest increase is again for Liverpool and North Wales which has seen a 0.4p rise.

Scottish Power, Bulb, EDF, British Gas and Shell have all confirmed to the BBC that they would be passing on the changes allowed by the government in full to customers.

Octopus said it would pass on cuts, but not rises, to customers. The company said it would absorb the increases, except for "Economy 7" customers. EOn is making changes to direct debit and billed customers, but not increasing rates for prepayment customers.

Although the price cap set by the regulator Ofgem increases in January, the government guarantee supersedes that, meaning the government has to pay the difference to suppliers to cover that increase in price.

"Ofgem's price cap changing on 1 January means some customers are receiving notifications from their energy suppliers about price changes up or down, however these changes will mostly be small," a government spokesman said.

He added that Ofgem's price cap was set at different levels for different regions, based on the costs to supply energy, and the Energy Price Guarantee applies a fixed discount to tariffs so these small differences continue to exist.