Fuel bills going up.

It probably goes something like this

At the start of the year 2000 the electricity generating companies (I'll call them EGCs) negotiate with the fuel providers for fuel for 2001. The price is set at £2/unit. The EGCs need to pay that now so for the year 2000 they need to charge £2+.

In 2001 the negotiations start afresh for 2002 and the price goes up to £3/unit; again the EGCs therefore need to charge £3+ for 2001.

In 2002 the prices go down to £2/unit for 2003. The EGCs don't reduce the price they charge on the grounds that the fuel being used in 2002 was bought in 2001 when it cost £3/unit

In 2003 the price returns to £3/unit. The EGCs continue to charge £3+ because they're having to pay for the fuel now.

Do you see the trick folks?

Substitute electricity supplier and EGC respectively and you've got the same thing at a closer level to the consumer; beautiful isn't it. Don't worry we've got the watchdogs to stamp on this using the laws set by our government that were pretty much written by...um...er the EGCs and suppliers; yay?

Before anyone picks holes in this a) No I don't know that's how it's really done, but I've heard the equivalent of both excuses used by the same company on TV; and b) that bit about who wrote the laws came from a conversation with the actual watchdogs themselves (who at the lower levels are mightily frustrated)