Cheapest Gas and Electricity

25/07/08  Ofgem in a press release today provided great news for all vulnerable energy customers including those on low incomes and who are described as fuel poor customers (those whose energy bills are greater than a tenths of their income) - an energy supplier's social tariff must be as good as they offer to other customers within the area. This will ensure that the vulnerable get the energy supplier's cheapest gas and electricity deals and that includes online energy deals. Previously social tariffs were required to be as good as the energy supplier's direct debit tariff, which may not have been the cheapest tariff offered by that supplier. All the major energy suppliers offer a social tariff to eligible customers, each with a variety of benefits, which can include a price freeze, a credit on a bill, or a discount, and if you fall into this category you are recommended to contact your current supplier for details on how they can help you. Also worth considering if you are over 60, your household is less than 4 and your house has 3 bedrooms or less, is E.ON's StayWarm, which is a fixed price dual tariff for 12 months, but which also includes other benefits such as free energy efficiency advice and deals on home insulation.

09/09/08  Rising wholesale costs have been blamed by all of the UK's big six energy providers for the recent substantial increases in gas and electricity prices and householders have been warned not to expect falling energy prices any time soon despite crude oil prices once again falling towards the crucial $100 per barrel level. The reason put forward for this is that while gas prices in Europe, where the UK gets a significant proportion of its requirements, are linked to the price of oil, there is a time lag between falling oil prices and a drop in gas prices due to forward supply contracts between energy suppliers and the gas producers. According to James Allpress, analyst at the energy data company ICIS Heren, "this winters wholesale UK gas price already has the high oil price built in, though if oil prices continue to fall, we should see that reflected in falling gas prices next year.' 

10/09/08 Capped or fixed price tariffs for gas and electricity work by guaranteeing that the price you pay per unit will not rise for a set period, usually between 12 and 36 months. More expensive at the outset but if you have a fixed gas and electricity price tariff you will have peace of mind and security in the knowledge that in today's turbulent energy market you will avoid any potential price increases during the period of your contract. Gas prices can of course go up or down and should they fall you must also be aware that you will not see a reduction in the price of your gas and electricity until the expiry of your fixed price contract. Currently only four of the big six energy providers, British Gas, EDF, E.On and Scottish Power offer capped or fixed priced gas and electricity deals.

11/09/08 Gordon Brown today announced a £910m package of measures that has been agreed with the big energy companies aimed at helping people reduce their gas and electricity bills. The measures include 50% off the cost of insulation for all households, free cavity wall and loft insulation for pensioners and households receiving benefits, a freeze on this year's gas and electricity bills for the poorest families plus action to end financial discrimination endured by those who use a pre-payment meter. The package also includes a continuation of grants paid under the Warm Front programme, which provides free central heating to low income and the poorest pensioner households, while cold weather payments are also to go up from £8.50 a week to £25 a week for pensioners, disabled people, and unemployed families with children under five.

3/10/08  On 1st October energywatch merged with Postwatch and the Welsh, Scottish and National Consumer Councils to form Consumer Focus, the new champion for consumers' interests in England, Scotland, Wales and, for post, Northern Ireland.

6/10/08  Energy regulator Ofgem today published their eagerly-awaited report on the state of the UK energy market. While the report states that the market is working well it also identified the following areas of concerns:

1) Although a significant number of consumers are now switching energy suppliers (18%) some need more help to allow them to compare costs. Ofgem is also concerned about the temporary nature of some offers listed on certain price comparison websites to the extent that the report referred to up to a third of people switching suppliers not seeing a fall in their energy bills following a switch of supplier.

2) Consumers with no access to the gas supply cannot get the better electricity deals with these households typically paying an extra £55 per year for their electricity. Rural areas are disproportionally affected by this with these consumers subject to a double whammy as they are also likely to be incurring higher heating costs if for example they use fuels such as oil.

3) The difference in the price charged for consumers paying in different ways does not reflect the difference in costs with those on pre-payment meters on average paying £118 more than a consumer paying by direct debit, while the cost to service a pre-payment meter averages out at £85. Even consumers paying by cash or cheque pay £80 more than consumers paying by direct debit.

Ofgem's report is not legally binding on the energy suppliers but if they do not take action to address the issues highlighted it is thought that Ofgem may refer the situation to the Competition Commission.

8/10/08  British Waterways have today announced plans to generate electricity from wind turbines and hydro schemes alongside canals and rivers across the country with a target of building 50 wind turbines and an unspecified number of small-scale hydro schemes on land it owns over a five year period with the capacity to generate enough electricity to power 45,000 homes. The location of the wind turbines has still to be decided.

18/10/08 Energy minister Mike O'Brien has given a clear signal to the energy companies that following the recent substantial fall in oil prices the government is keen to see the energy companies pass on to consumers a related fall in wholesale gas prices, which of course also impacts on electricity prices as so much of the UK's electricity comes from gas-fired power stations. The energy companies have yet to respond and while we believe our comments on the 9th and 10th September continue to be very relevant it will be very interesting to learn what does eventually happen given the wide variance on the reliance the individual energy companies have on gas to generate electricity.

1/11/08  Last week the electricity company Electricity 4 Business (E4B) went into administration, leaving approx 40,000 small businesses with British Gas as a supplier of last resort, which could mean that they are now being supplied on a rate that is higher than originally contracted with E4B. If you were an E4B customer it could be worth checking what you are now being charged by British Gas against your original contract price with E4B and also if you could save money by changing to another supplier such as npower Business, who only yesterday announced a reduction of approximately 11% in the price of their business electricity, and 5% for their business gas. (the Switch with Which? energy price comparison service is totally focused on finding the cheapest domestic gas and electricity prices.)