EDF has confirmed bills will rise by an average of £693 a year from April in line with the new energy price cap – affecting two million people on standard variable tariffs.
The supplier will raise its rates from spring, after regulator Ofgem gave providers the go-ahead to increase the maximum rate on variable tariffs by a staggering 54%.
It follows the collapse of two dozen suppliers due to soaring wholesale costs and comes as households face the biggest cost of living squeeze in decades.
EDF will hike its standard variable tariff (SVT) prices to an average £1,971 a year based on typical use from April 1, 2022.
Scottish Power has hinted it will also charge "in line with the cap", although a statement has not been formally issued.
On February 3, Ofgem announced it would increase the price cap to its highest level, following rocketing wholesale prices as global businesses reopened following the pandemic.
On average use, the energy price cap is set to rise from £1,277 a year to £1,971 a year for a typical dual-fuel household paying by direct debit.
The cap sets a maximum charge on the rate you pay for gas and electricity but it’s based on average usage – meaning the actual cap will depend on your usage, ie use more you'll pay more, use less and your costs will be lower.
EDF's standard tariffs are currently set at the maximum allowed under the cap, at £1,277 a year on typical use.
If you're a prepayment customer, it's likely your tariff will also rise from the current maximum allowed under the price cap to the new limit, from £1,309 a year to £2,017 a year from April.
Households on fixed tariffs will not see their prices change until their deal ends – once this happens, you’ll need to shop around to find out if what is available on the market is lower than the £1,971 tariff.
Right now, the market's cheapest fixed deal is on average 73% more than the current price cap and 12% more than the new cap, so you will need to compare your options.
Philippe Commaret, managing director of customers at EDF, said: "We know that these changes, driven by global gas prices, will not be welcome news for customers, but we want to be fully transparent and give our customers as much notice as possible. We've never stopped offering our customers help and will continue to do so, although the scale of the global problem means we are constrained in how much we can do.
"It is good to see the Government acting now to take some of the sting from the forthcoming rise in April, although we know many customers will continue to struggle. We will work with the Government to implement the schemes in the best way possible for customers.
"The market also needs longer-term reform to ensure we don't end up here again, and Britain needs more of its own nuclear and renewable power generation and greater energy efficiency to reduce reliance on gas from other countries."
If you are struggling to keep up with your energy bills, here are three discounts you could be entitled to right now.
The Government announced last week that 28 million households will get a £200 "rebate" on their energy bills from October, but Rishi Sunak's solution to the energy crisis has been branded a farce with ministers likening it to a “dodgy loan, not a proper plan”.
That's because the money will be clawed back by hiking bills by £40 per year over five years from 2023.
Labour's Kier Starmer described the measure as a "buy now, pay later" cost of living plan.
It comes as people brace for rising inflation, tax hikes and being clobbered by energy bills set to rise by £693 per year for those on default tariffs from the start of April.
Sir Keir told Mr Johnson to “stand up to this Chancellor” by telling him to support families “rather than loading them with debt” and take a look at the “bumper profits” of oil and gas giants.
