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All large suppliers will cut prices, yet critics cry foul

EDF Energy’s announcement rounds out energy cost reduction news – but not everyone is happy

Edf

EDF cuts prices by 1.3%

Just over two weeks after E.ON announced that it would drop prices for its standard plan customers, all six of the big energy suppliers have followed suit with cuts of their own.

EDF Energy was the final big supplier to state its cut of 1.3%, effective 11 February.

‘Phoney price war’

The price reductions range in the amounts — from EDF’s 1.3% to npower’s 5.1% — and in their date of implementation — from E.ON’s effective date of 13 January to SSE’s of 30 April — causing critics to cry foul.

In addition to the relatively low cuts, the change only impacts customers on standard plans, and only applies to gas costs (those on electricity only tariffs will see no change on their bills).

Citizens Advice made note of the difference between the average cost of a supplier’s standard tariff as compared to that of the same supplier’s cheapest plan — more than £200 in half the cases — and as such have dubbed the cuts a ‘phoney price war’.

Gillian Guy, Chief Executive of Citizens Advice, said:

“Energy firms are engaging in a phoney price war. Token energy price cuts to standard tariffs do not reflect the big savings that energy firms can pass on to households. Npower customers could save as much as £240 by switching to their cheapest available tariff but they are cutting prices by a fraction of this.

“Cheap deals are great for customers and any price cut for energy customers struggling to make ends meet is welcome, but it should not be only the savviest consumers who benefit from the four year low in wholesale energy costs. Many who currently do not switch are those whose finances are the most stretched, including older people and low-income families. Customers on energy prepayment meters can pay a yearly average of £80 or more for a second-class service. Energy suppliers must pass on savings to all their customers, not just those able to switch to get the best deals.”

Despite cuts, many customers ‘aren’t getting a fair deal’

These sentiments was shared by uSwitch Director of Consumer Policy Ann Robinson:

“With the final price cut announced, it’s now official that standard tariff customers simply aren’t getting a fair deal. These meagre reductions are too little too late and must be increased to help hard-pressed consumers struggling with their energy bills this winter.

“And, with wholesale electricity costs also falling over the past year, why hasn’t a single big six supplier pledged to cut electric bills for its customers?

“To tackle high energy costs, consumers should take matters into their own hands and shop around for a better deal. With a £347 a year difference between the average big six standard tariff and the cheapest fixed deal on the market, consumers would be better off making their own price cut by switching.”

Cheapest plans versus standard plans

Supplier Effective date of price cut Standard dual fuel cost after cut Current cheapest dual fuel plan Price difference versus Standard dual fuel plan
E.ON already in effect £1,145 (down £24) £920 £225 cheaper
ScottishPower 20th February £1,167 (down £32) £930 £237 cheaper
npower 16th February £1,169 (down £36) £963 £206 cheaper
EDF Energy 11th February £1,155 (down £9) £999 £156 cheaper
SSE 30th April £1,158 (down £28) £1,174 £16 more
British Gas 27th February £1,156 (down £37) £1,183 £27 more
 This table’s average bill sizes are based on a medium energy user paying monthly by direct debit, with bill sizes averaged across all regions:To learn more about energy user groups and determine where your usage fits in, visit our guide to gas and electricity user groups. Does not include energy tariffs available solely through private initiatives such as collective switching schemes.
  • kitchener

    although I have got a quote for a £20 pound reduction in my monthly direct debit with another company I am over £200 in debit with my current supplier, being the most expensive months for fuel. So I would have to pay this off before switching so making a switch not worth while at this time. Perhaps at the end of the summer?

  • Maureen Beswick

    I chose to switch using uswitch. Although there were two companies cheaper, they both charge a fee to moved to another supplier before the end of the fixed plan. The one I chose, Npower, does not. Taking this into consideration and the fact that there could be lots of changes in the market, if public opinion is listened to by the big six energy companies I made the decision to pay a fraction more.

  • Bigals

    Energy bills to me are a pain to understand especially when the meter reading figures are changed to a calorific formula . I asked EON why their bills are not plain and simple especially for the older generation e.g. meter reading usage multiplied by unit costs will give a near enough figure . Also the daily standing charges should be abolished , what are they for ? and if proven or justified they should be absorbed into the energy unit costs. It seems to me that the energy industries lack clarity and that the regulators are not in control. Plain and simple is what is needed

  • Richard

    Register with the Cheap Energy Club on the Moneysavingexpert site. You will get access to some cheap tariffs if you switch before February 12th 2015. Sainsburys energy is the best pick……..

  • Diogenes Jenkins

    I was with EDF paying £100 a month for electric.
    Had a statement from them showing £500 (or something) in credit, so applied to get it refunded – but we only got about £180 back – the rest evaporated in mystical charges…

    Dumped EDF 2 years ago and went to British Gas for £68 a month, but we’ve still ended up £150 odd in credit.

    Now, by hunting around I’ve got a quote for £54 a month – that’s nearly half of what EDF charged 2 years ago!

    I don’t support Labour, but if Miliband gets in I hope he kicks the big 6 energy suppliers arses.
    The big 6 energy suppliers make Delboy Trotter look like a Christian Aid Volunteer!

  • hank

    a standing charge is a charge for the meter and to cover the cost of supply of energy to your household
    and lol Jenkins its like playing monopoly to the big 6

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