Between January 2006 and January 2007, the average UK consumer saw their gas and electricity bills rise by 36% and 23% respectively. These increases relate directly to further rises in the wholesale price of gas during the early part of the year.

However, later in 2006, wholesale gas prices reduced, due to increased gas capacity resulting from the opening of two new gas pipelines from Europe and reduced demand due to a mild winter.

This has enabled us to introduce price reductions to customers in 2007.

What has happened to our pricing?

During 2006, most of our customers experienced prices rises of 47% for gas and 30% for electricity. Exceptions include the 'StayWarm' tariff, where the price only changes on renewal, and our various capped schemes. Taking all these together, some 20% of our domestic customers are protected from the immediate impact of the price rises. Continued increases in wholesale prices during the first half of 2006 meant that, despite a fall in prices towards the end of 2006, we were faced with the challenge of minimising the impact on customers while protecting business value.

We've continued to help people to reduce their bills and improve the energy efficiency of their homes by providing enhanced training for all our call centre staff so they can offer energy efficiency advice to customers.

We also continue to provide extra support for customers living in fuel poverty, and those who are particularly vulnerable. This includes offering free and discounted cavity wall insulation and loft insulation and free energy-saving light bulbs for all residential customers, as well as free benefit entitlement checks, so customers can be sure they are claiming all the state benefits they're entitled to. There is more on our action to address fuel poverty here.

Our range of fixed-price products has also helped protect over 12% of our business customers from the immediate impact of the recent price rises. Higher energy costs for business customers ultimately translate into higher prices for the goods and services they supply, as cost increases are passed on, so it is in everyone's interests to keep these as low as possible. We're also developing alternative products making it easier for small and large businesses to manage their energy costs.