Green levy cuts provide £75m windfall to energy companies
An estimated 5m consumers on fixed price tariffs will see Government cuts pocketed by suppliers
According to the Daily Mail, the big six – British Gas, EDF Energy, E.ON, npower, ScottishPower and SSE – will make significant savings thanks to the Government’s green levy cuts and a drop in network charges, despite the latter being implemented to help hard pressed consumers.
The savings are due to some of the big six refusing to pass cuts on to about 5 million customers on fixed rate plans and slow implementation times.
A reduction in the energy usage levels which energy regulator Ofgem attributes to the average household, has further complicated calculations regarding the level of savings a typical consumer stands to make.
How suppliers are implementing the cuts
npower will only implement cuts for customers who are on a variable tariff that was affected by the winter energy price rises. Fixed price customers will continue to pay the same amount despite reductions to green levies.
ScottishPower implemented a similar policy, but will cut bills for those on fixed plans who end up paying more than they would have, if they had been on a variable or standard deal.
EDF Energy and E.ON both took green levy cuts into account when implementing price rises, and as a result were able to keep their price rises lower than the rest of the big six. This also meant that fixed price customers didn’t see any benefit from price cuts.
Only British Gas and SSE reduced bills for all of their customers.
Slow implementation times have also been criticised, with SSE only introducing reductions on 28 March.
Cuts still leave customers paying more than last year
Despite the green levy cuts, the vast majority of Brits will be paying more for their gas and electricity this year, as the cuts are far from wiping out winter price rises.
Speaking on the issue, Director of Consumer Policy at uSwitch, Ann Robinson said: “Suppliers could have made this whole process simpler by cutting prices across the board for both variable and fixed-price customers. It would have been fairer and easier for consumers to get their heads around.
“Instead, it looks as though some suppliers are cherry-picking who should benefit. Those who won’t be getting a price cut, even if it’s for a valid reason, will be left feeling hard done by and that’s a real shame given that this whole thing should have been an easy way for suppliers to regain lost ground with customers.”