Ali Hussain
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The energy regulator Ofgem is urging customers of EDF Energy and Scottish Power to switch to a cheaper provider after the firms refused to cut prices in line with the rest of the industry.
The recent dramatics falls in wholesale energy prices sparked a fierce price war between some energy firms, but EDF Energy and Scottish Power have so far failed to pass savings on to their customers despite pressure from the energy regulator to do so.
Ofgem, though unable to fine the firms for making such huge profits, is now urging customers to force a change by withdrawing their custom. It says they can save up to £140 a year by doing so.
The two companies will become the most expensive suppliers of dual gas and electricity next month when price cuts from Powergen and Npower come into effect. British Gas and Scottish & Southern Energy have already chopped their rates.
EDF Energy, which has 5.5 million customers, and Scottish Power, with 5.2 million, said their prices were “under review”, but consumer groups have already suggested that customers should not wait for them to move.
Switching between companies has reached a new peak with more than 600,000 households doing so in January and February this year.
“Our research also shows that a big price gap has opened up leaving EDF Energy and Scottish Power customers paying over £100 for remaining loyal,” said Alistair Buchanan, chief executive of Ofgem.
“Competition is all about customer power – any supplier that tries to buck the market by not lowering their prices or failing on service risks an exodus of customers.”
Until recently, British Gas had always been the most expensive dual-fuel supplier, but it cut its prices after losing more than a million customers in the past year.
The average standard dual-fuel tariffs from EDF Energy and Scottish Power are £929 and £912 respectively, according to TheEnergyShop, a price comparison firm. Npower, the cheapest dual-fuel provider from next month, will charge an average of £824.
When it comes to gas tariffs, EDF Energy is the most expensive, with an average bill of £624. Scottish Power charges £591. Scottish & Southern, on the other hand, charges £504, down from £574 before its cuts earlier this year.
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