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Energy firms defend price rises

The "Big Six" energy companies were forced to defend recent hikes in energy prices to a committee of MPs today. They blamed wholesale costs and green taxes but their explanations were dismissed as a "list of excuses" by Labour leader Ed Miliband.

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Ofgem: Wholesale energy prices rise 'by just 1.7%'

Ofgem said data shows that while the price rises announced this autumn by the energy companies have averaged 9.1%, wholesale prices have risen by just 1.7% - adding just £10 to the average household bill of £600.

The energy regulator said that its estimates for the wholesale price were based on how a representative supplier would typically buy energy, using forward purchases of gas and power at 12, 18, or 24 months ahead, to smooth out volatility in prices.

Ofgem says data shows wholesale energy prices have risen by just 1.7%. Credit: Yui Mok/PA Wire

These buying strategies vary between suppliers, meaning each sees different overall changes to wholesale energy costs.

But the industry regulator said that looking ahead to this winter, the price paid for energy by suppliers was rising sharply compared to last winter, with gas up 8% and electricity up 13%.

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