EDF Energy announces 5% price cut

EDF Energy announces 5% price cut

The move makes EDF first of the 'Big 6' energy suppliers to announce a price cut following a decrease in the cost of wholesale gas.

Small suppliers OVO and Co-op both announced price cuts of 5% and 3% respectively last month and last week rumours of a similiar price drop from British Gas, the UK's largest energy supplier, hit the press.

Energy prices recently went up by an average of £224 following two price rises in under 18 months, which added a total of £2.24 billion onto household energy bills in Britain.

EDF implemented an increase of £195 or 19% in this period, although today's announcement means that its customers will see the cost of the average dual fuel bill drop from £1,241 to £1,203.

Ann Robinson, Director of Consumer Policy at uSwitch said that the decreases, although welcome, do not deflect from the high cost of energy in the UK: 

"Now that EDF Energy has responded, other Big Six suppliers will be under pressure to bring their prices down again too, although reductions look unlikely to wipe out the £224 or 21% increase seen by households last year.

"EDF Energy increased its prices by 19% or £195 last year.

"Its average household energy bill in October 2010 was £1,037. After today’s cuts it will be £1,203 - £166 or 16% higher than just over a year ago.

"Pressure to cut prices has been mounting and now one of Britain’s biggest energy suppliers has let the cork out of the bottle.

"As well as being the last supplier to increase their prices last year, EDF Energy has become the first to announce a price cut.

"It’s good news for consumers, but look through the fizz and the bubbles and we’re left with the cold reality that prices are still substantially higher than they were just over a year ago. 

"The fact is that prices rocketed by £224 or 21% in the last 18  months – at the moment EDF Energy customers will only see their gas bills decrease, and the cut doesn’t go anywhere near cancelling out the most recent price hikes.

However, Ms Robinson does hope that the move will be an indicator of future price decreases across the board:

"Hopefully this move will put more pressure on the rest of the Big Six to follow suit and cut their prices too. 

"But households can mitigate the impact of high energy bills by shopping around for a cheaper deal and cutting back on the amount of energy they use.

"Moving to dual fuel, paying by direct debit and signing up to a competitively priced deal will save you up to £420, far more than price cuts will give you based on today’s evidence.”  

What are the average household bill prices? 

Source: uSwitch.com

Based on a medium user consuming 3,300 kWh of electricity and 16,500 kWh of gas with bill sizes averaged across all regions.

See also:

Co-op drops its energy prices

British Gas to decrease energy prices?