First Utility promises no price rises, while EDF unveils new fixed tariffs

First Utility has announced a price freeze on variable tariffs while EDF Energy has announced two new fixed deals. We take a look at how they stack up.

Two energy providers have offered up new deals to guard households against rising energy bills.

EDF Energy has announced two new fixed price tariffs, while First Utility has announced a price freeze on variable tariffs until March 2014.

First Utility's freeze

First Utility is throwing down the gauntlet to the ‘big six’ energy companies by promising to freeze its energy prices this winter.

The UK’s largest independent power supplier has pledged to freeze the cost of its standing charges and unit rates on its variable tariffs until March 2014.

First Utility’s best variable tariff comes in the shape of the iSave v16 , which is in fact the cheapest dual fuel variable rate tariff around at the moment.

An average bill comes to £1,155 based on typical consumption (16,500 kWh of gas and 3,300 kWh of electricity per annum) and benefits from no early termination fees, meaning you can switch without getting charged if prices change. However, you will have to manage this account online and pay by monthly Direct Debit.

So new and existing variable tariff customers can ride out the winter without any nasty surprises.

As well as the cheapest variable deal, First Utility also offers the cheapest fixed dual energy tariff with its iSave Fixed v9. This deal is fixed until April 2015 and a typical bill will cost £1,170 a year based on average consumption.

But while First Utility has the cheapest fix it’s not the longest lasting one available right now; nPower and most recently EDF have taken up that mantle.

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EDF Energy's fixes

EDF one of the 'big six' energy providers has launched two fixed energy deals despite predictions of a price rise from experts.

The Blue+Price Freeeeze March 2017 will fix prices for four winters and is the joint longest deal available, matching the length of nPower’s Price Protector March 2017.

The new plan will cost £1,340 a year based on average household energy consumption - an £80 saving on a typical dual fuel bill of £1,420. It’s the leading deal for long term fixes - but only just- coming in at just £1 less than nPower’s alternative.

The Blue+Price Freeeeze March 2015 is a shorter fixed dual fuel deal that will cost £1,184 based on typical consumption. This tariff comes with a price promise, to alert customers if they can save £1 a week or more (£52 a year) elsewhere. Currently this deal is the third best on offer in terms of cheapest fixes, costing £14 more than the leading First Utility iSave Fixed v9.

Both EDF’s new tariffs come with no early termination fees, so should prices drop elsewhere you can move onto a better deal without incurring any costs. Both deals also guarantee the electricity provided is from low carbon, nuclear power stations.

Fixed vs. variable

So which of the new deals is worth going for?

Well First Utility’s variable iSave v16 tariff is the cheapest around at the moment and could stay that way until March 2014 if other providers go ahead and announce price hikes.

With a variable energy deal you tend to benefit straight away from a cheaper offer, instead of waiting for future price rises elsewhere to highlight any savings. Usually you take a gamble that energy prices won’t rise and accept you will only benefit should they stay the same or fall. However, the First Utility price freeze means you can take advantage of the cheapest variable deal and still benefit from the peace of mind a fixed deal normally offers.

On the other hand, you might want longer than six months assurance of the cost of your gas and electricity. EDF is offering the longest fix and is the cheapest of the long term offerings, though £170 more expensive than the cheapest overall fixed rate deal from First Utility.

Fixed rate tariffs offer a set price on the unit costs of energy. This type of deal can offer future savings if prices rise during the term and can prevent any shock increases as long as your consumption stays the same. But going for a fixed energy deal is a bit of a gamble. You’re protected from price rises (which you usually pay a premium for), but not price drops and leaving early can sometimes cost you.

Luckily with EDF's long-term fixed tariff there are no early cancellation charges so you can move on if prices start to drop significantly elsewhere and with its March 2015 deal you will get an alert if this happens anyway.

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Imminent price rises

The moves from EDF and First Utility come at a time when households are braced for a fresh round of energy price hikes.

Around this time last year the ‘big six’ (SSE, Scottish Power, British Gas, npower, E.ON and EDF) all announced price rises which they blamed on rising wholesale costs as well as what they had to spend implementing Government green schemes.

SSE was the first to raise prices in August 2012 and the domino effect saw British Gas, npower, Scottish Power and EDF all rushing to announce price increases in October, with E.ON the last to reveal its plans in December.

Of the big six EDF announced the biggest increase of 10.8%, but First Utility announced the largest hike of all with a price increase of 18.6% - however this was much later on after the winter in August 2013.

Experts are predicting that energy companies are set to announce rises again this year, which could be between 5% and 10%, adding up to £140 to the average dual fuel bill. Government levies and wholesale energy costs are expected to be blamed again.

The cheapest energy deals

With price rises seemingly imminent, the time is now to switch and save.

Here are the cheapest energy deals around right now.

* Savings against an average bill of £1,420 as determined by Ofgem                                                            

All calculations are for an average usage dual fuel household paying by monthly direct debit. Average usage as defined by Ofgem is 16,500 kWh pa of gas and 3,300 kWh pa of electricity.

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