Third-party charges on household energy bills have jumped by 33% for gas and 9% for electricity this year, compared with 2021-22 prices.
That’s according to new analysis by Cornwall Insight which suggests this rise is driven mainly by an increase in network charges due to the collection of unprecedented Last Resort Supplier Payments (LRSPs) from domestic consumers.
The money collected through the payments is used to compensate energy companies who have taken on customers from failed suppliers, with 27 companies leaving the market in 2021.
Network charges, the second-largest component of energy bills, have jumped by an average of 22%.
LRSP payments alone have driven an uplift of £34.46 and £32.54 for average domestic electricity and gas bills respectively for the year, the consultancy has said.
Previous research found that the cost of the energy suppliers’ exits from the market which is felt by customers on their bills was more than a third extra this year, compared to 2021.
Laura Woolsey, a Senior Analyst at Cornwall Insight, said: “Domestic consumers have been left footing the bill for the unprecedented number of supplier failures, a consequence, at least in part, of the Default Tariff Cap restricting the revenues suppliers could collect.”
A few days ago, the boss of a fintech startup told ELN that failed energy providers were in financial distress years before the current energy price hikes.
