Small supplier Ovo Energy today promised to offer householders energy bills on average under £1,000 a year.
It threw down a challenge to the Big Six suppliers, by suggesting some were “locking in high prices through freezing tariffs”.
The energy company said the wholesale price of gas has fallen by 9.5% this winter, meaning it has been able to pass on savings worth more than £100 to customers since September.
It has three fixed tariffs on offer, the Cheaper Energy Plan, the Better Energy Plan with 15% renewable energy and the Greener Energy Plan which offers 100% renewable power.
The first of these is the tariff which should come in under the grand mark, for a UK average medium dual fuel user (3200 kWh electricity and 13500kWh gas), paying by direct debit, inclusive of VAT.
In a dig at his larger rivals, Stephen Fitzpatrick, Founder and Managing Director of Ovo Energy said: “Fair, transparent pricing will help consumers to trust the energy market again. That means when wholesale prices fall, customers shouldn’t see prices being frozen, they should see them falling.”
Mr Fitzpatrick suggested their “freezes” could have been price cuts: “Lower wholesale costs and recent government policy changes have meant that the cost of energy is lower now than it was 12 months ago. Bills should be too.”
Energy watchdog Ofgem just referred the Big Six to the Competition and Markets Authority to check whether competition is working in the energy sector.
Ofgem said there was “tacit co-ordination” between suppliers as to when they put up their prices and by how much.