Co-operative Energy has outmanoeuvred its bigger competitors by announcing a 2% price cut over the winter – after five of the Big Six whacked up their tariffs.
As British Gas hiked its prices by 6% today, the Co-op called on other suppliers to follow its lead and put customers before profits.
The smaller supplier is dropping its electricity charges by 2% from 21 December 2012, taking the average price off its average bill down from £1,166 to £1,157 a year. This makes its prices lower than for last winter.
Co-operative Energy says this will make its tariffs £88 cheaper than the average Big Six standard tariff for online direct debit and £178 cheaper for offline quarterly credit.
Nigel Mason, who co-founded the firm said: “Our customers’ interests come first. Unlike our competitors we are not driven by a need to make profits for external stakeholders and we pledge to offer a fair and transparent price for all our customers. Wholesale electricity costs have come down and we were keen to ensure this was reflected in customers’ bills as soon as possible.
“At a time when the image of the energy market is being further tarnished with allegations of manipulation of wholesale gas prices, Big Six price increases and reports from Ofgem that suppliers’ profit margins are increasing, we need to show that we’re doing all we can to put customers first, build trust and restore faith, which is why we’ve passed on savings and are distributing £105,000 to our customers this month as a half yearly share of profit.”
More than 60,000 households have switched to Co-operative Energy in its first eighteen months.
Pricing experts suggest the supplier is trying something new – although the policy of treating all payment methods the same way means it is not as competitive for direct debit customers.
Tom Lyon, energy expert at uSwitch.com said: “This move suggests that the Co-op is serious about putting ethics back into the energy market – by cutting its prices, even by as little as 2%, it is sending out a clear message that not all suppliers are the same.
“At the end of the day, Co-operative Energy is demonstrating why consumers deserve and need a strong competitive market – by voting with their feet consumers can force change and encourage best practice. And while its prices aren’t market-beating, they still offer a saving especially for those households that have never switched.”
The only one of the Big Six not to raise prices this year is EON.