British Gas hikes power and gas charges

By Pete Harrison

LONDON (Reuters) - British Gas, Britain's biggest energy supplier, raised charges for domestic gas and electricity by 15 percent with immediate effect, its owner Centrica (CNA.L) said on Friday.

It said wholesale forward gas prices had risen 51 percent since it cut household charges last spring, eroding its profit margins to around 1 per cent, and if it didn't hike prices now it would make a loss in 2008.

British Gas has a string of gas-fired power stations and is therefore more exposed to swings in the wholesale price of gas than its rivals, many of which have hydroelectric and coal-powered stations.

It made its move after the energy regulator this week ruled out newspaper allegations the big power firms were colluding on prices.

Centrica shares rose 2.6 percent to 346.75 pence by 1241 GMT.

Rival EDF Energy (EDF.PA) said this week it would increase power prices for its customers from Friday, less than two weeks after Germany's RWE (RWEG.DE) announced double digit increases for customers of its UK unit npower.

Britain's energy regulator met finance minister Alistair Darling on Tuesday to assure the government the price hikes were the result of rising global energy costs, the cost of fighting climate change and increased network investment.

Scottish & Southern (SSE.L), which has a broad mix of power sources including coal, hydro and wind, said it would not raise prices until March 30 at the earliest.