The independent energy supplier has joined the ranks of British Gas and SSE, which announced price rises of 9.2% and 8.2% in the past week.
Co-operative Energy is owned by its customers and says the price rise represents only half the actual cost increase facing the business. According to Co-operative Energy’s press release, the rise will see the average customer faced with an average dual fuel bill of £1,315 per year – £87 less than a British Gas customer.
Co-operative Energy is a fairly recent addition to the UK energy market and launched in 2011. The supplier has roughly 150,000 customers and has pledged to provide “fair prices” and to “treat customers fairly”.
‘We have decided to effectively go halves’
Ramsay Dunning, general manager of Co-operative Energy, said: “Due to increasing energy market costs beyond our control, namely the costs associated with buying energy and getting it into customers’ homes, we find ourselves in the position of having to now pass these costs on to our customers.
“As a customer-owned business we wanted to do everything within our power to make sure that the increase we are forced to pass on as a supplier is as low as possible. To demonstrate our commitment to our customers we have decided to effectively go halves and absorb the remaining cost.
“Last autumn, when the major suppliers increased their prices by, on average, 8.5% for gas and 8.3% for electricity, we were the only supplier to cut our electricity prices and the only supplier to promise to freeze all our prices throughout the cold winter months when consumers use most energy. Whilst we can’t promise a lengthy freeze as we have done previously, we do promise to hold our prices for existing customers for as long as we possibly can.
“As a customer owned business we have always looked after our customers at the expense of growing the business through better deals for new customers, and again we are looking after our customers and owners first and foremost.”
‘No supplier – large or small – is immune to pricing pressures’
Tom Lyon, energy expert at uSwitch, said: “This move shows that no supplier – large or small – is immune to pricing pressures. In fact, historically smaller suppliers have typically been quicker to drop their prices, but also quicker to raise them purely because they are far more exposed to changes on the wholesale market. The key difference here though is in how Co-op Energy is dealing with this, making a point of saying it is sharing the pain and setting out to protect existing customers over new. This is refreshing, but whether it’s enough to soften the blow for its customers remains to be seen.
“The price increase is smaller than both British Gas’ and SSE’s, but for cash-strapped consumers it could still be a deal-breaker. If affordability is a concern then it’s a good time to look at the competitive fixed price tariffs that are currently available. These will protect you from price hikes for anything up to four winters and are being offered by small and large suppliers alike.”