Scottish Power cuts energy bills by 3.3%

Major energy supplier has confirmed it will pass on Government cuts to customers.

Scottish Power has confirmed it will cut the price of standard dual fuel tariffs by 3.3% or £42 from 31st January.

It is the fourth energy provider to announce a cut to winter price hikes after the Government made changes to green levies.

Customers with a variable tariff from Scottish Power will see their bills lowered, though the cut only partially offsets the 8.6% raise implemented in December.

Energy bills

The move means a price reduction of an average of £42, while customers will also be paid a £12 rebate, bringing the total amount to an average of £54.

These changes will bring the average energy bill down to £1,199 a year. 2.2million households will be affected, although those on a fixed-rate tariff won't see any change to their bills.

Today’s news follows a spate of price hikes just before Christmas. All the Big Six announced rises, with the highest from npower at 10.4% which came into force on 1st December. Shortly after, the Government confirmed it wanted to reduce the green levies paid by the energy companies. Four providers have now reduced their intended hikes.

Of those only British Gas has said price cuts will apply to all customers, whereas the customers of the remaining providers will only see a fall if they’re on a standard rate tariff. Npower and SSE are yet to confirm changes to price hikes.

Neil Clitheroe, CEO of Energy Retail and Generation for Scottish Power, said: “We recognise that we need to continue to work hard to reduce bills for our customers through offering competitive fixed priced products and comprehensive energy efficiency advice. 

“As part of this ongoing commitment, we will try to avoid any further price rises in 2014 but this will depend on whether there are increases in wholesale energy prices or other costs outside of our control.”

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Changes to green levies

At the beginning of December the Department for Energy and Climate Change (DECC) confirmed it would reduce the green levies energy companies have to pay.

This was done by reducing the Energy Company Obligation (ECO), an insulation scheme from the major suppliers, introducing a £12 universal rebate for customers for the next two years and by getting the electricity distribution network to agree to lower network costs.

In total the reduction will save households around £50 a year - if the savings are passed onto customers.

How to save money on your energy bill

Switching energy companies is the best way to save money on your bill, especially if you've not done it for a while. The cheapest tariff at the moment comes from first utility at £1,037 and this is £286 cheaper than the average bill of £1,323.

The table below outlines the five cheapest tariffs currently available.

* Saving calculated against an average bill of £1,323 Source: Energyhelpline

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