The alternatives to the Big Six energy providers

Instead of blindly paying one of the Big Six energy companies, why not seek out some more competitive deals from a less well-known provider?

Four of the so-called 'Big Six' energy companies – SSE, British Gas, npower and ScottishPower – have already announced price rises this winter. The other two – EDF and E.On – are almost certain to follow suit.

Senior management from all six companies have now appeared before the Energy and Climate Change Committee to defend their position.

They all claimed that wholesale prices are rising, pushing up their costs. But this was refuted by Dale Vince, founder of smaller player Ecotricity, who said: "If you look back over 12 months, then they are not justified in raising their retail prices because of wholesale movements in this year". Indeed, his company has announced a price freeze.

And Co-operative Energy, which shares its name and its philosophy with the wider Co-operative Group, only increased its prices by 4.5%, half the average 'Big Six' increase.

So instead of just accepting the rises and sticking with a Big Six supplier, why not have a look around at some of the smaller companies in the market?

The smaller players

Ironically, one of the smaller companies has the cheapest dual fuel tariff on the market right now, as our table below demonstrates.

The most well-known alternative companies are First Utility, Ovo and the Co-op but there are still more to choose from.

It’s important to check who owns the company, as in some instances a Big Six provider will be behind it. This is the case with Ebico and Marks & Spencer Energy, which are both owned by SSE, and Sainsbury's Energy, which is backed by British Gas.

Many smaller companies tend to focus on green or renewable energy sources. Good Energy, for example, produces its own energy from certified renewable sources such as wind and water.

As the company then sells this energy back to customers, prices generally stay the same and haven’t changed since April 2009.

Ecotricity works in a similar way and says it was the first company to offer green electricity back in 1996. Any profits it makes go back into funding the building of new sources of green energy – also called ‘Bills for Mills’.

Ovo promises simpler statements and more use of renewable technology to generate energy.

Another company supplying energy is Utility Warehouse. This site promises to give its members the cheapest tariffs available and it works as a savings club with members getting discounts for signing up their friends.

However, there has been quite a bit of negative press around it and it’s been slated for being complicated and unclear. Therefore with this, and any new provider, it’s worth doing your homework first and comparing a few different tariffs before you choose one.

See if you can switch and save on your gas and electricity

The cheapest tariffs

Here are the cheapest fixed tariffs right now for dual fuel customers. You'll notice that two of them are from non-Big Six companies.

*Based on a typical dual fuel tariff costing £1,420 (Source: Ofgem). All costs are for a yearly average usage dual fuel household paying by monthly direct debit. Average usage defined by Ofgem as 16,500 kWh p.a. of gas and 3,300 kWh p.a. of electricity.

Data correct as of 30th October 2013

What’s the catch?

Many people may be put off switching to a small provider because of its size or the options for contacting it – for example, First Utility is online only.

There is also the danger that if a smaller company brings out a market-leading tariff, the size of the company will prohibit it from dealing with the influx of new customers, as has been the case with First Utility earlier this year.

We’ve also reported problems with another small provider, Spark Energy, which has an appalling track record when it comes to customer service.

However, this problem is not unique to any energy company as we’ve also had a lot of complaints in from customers of the Big Six providers.

If you’re looking to switch the best thing to do is first compare the prices available. It's up to you if you're choosing to switch for cheaper prices or because you prefer how a company works but first make sure you're able to switch without a penalty.

See if you can switch and save on your gas and electricity

This article has been updated since its original publication

More on gas and electricity:

How to beat the winter energy price rises

Is switching energy providers pointless?

Ten ways to save on energy

Renters missing out on £190 year by not switching energy suppliers

How prepayment, credit and smart energy meters work