The ethical energy company is taking a ‘leap of faith’ and banking on the Government cutting environmental levies.
Co-operative Energy has announced it will cut its average gas and electricity price rise of 4.5% down to 2.5%.
Customers who would have had the average 4.5% price increase applied to their bills in January, will now be protected from the full rise. However, the 4.5% rise took effect for new customers from 21st October so these customers will now see a 2% price cut on their energy bills.
The ethical energy provider says the move is in response to talk of the Government scaling back green levies.
Ramsay Dunning, group general manager at Co-operative Energy said: “Given the expectation that an announcement is imminent that the burden of green and social taxes will be removed by the Government we have decided to take a leap of faith and remove this element, which represents 2%, from our previously announced average 4.5% price increase.”
For Co-op’s variable tariff customers the change means the average annual cost for a dual fuel bill will only rise from £1,258 to £1,289 – an average increase of £31 instead of £57. And for those that signed up after 21st October the change actually means an average £26 drop in the cost of their energy.
But if the green taxes remain in force the Co-op has said it will have to review this decision after the winter months.
Energy prices and green taxes
Five out of the ‘Big Six’ energy companies have announced winter energy price rises and all have indicated that the cost of green levies were partly to blame.
Scottish and Southern Energy (SSE) was the first to confirm a price rise, of 8.2%, which comes into force on Friday this week.
British Gas was next with a 9% rise, or £123 per year on the average bill, followed by npower which had the biggest price rise of 10.4%. Then Scottish Power said it will push prices up by 8.6% on 6th December.
[SPOTLIGHT]The most recent announcement came from EDF. The company said it would put prices up by half the level of rivals at 3.9% from 3rd January because it was factoring in a reduction in the costs of the Energy Company Obligation (ECO) and other social and environmental schemes.
Following EDF’s announcement npower said it would cut its planned price rise from 10.4% to 6% if the Government cuts green levies and SSE has also chipped in and said it would adjust bills accordingly if the Government were to take action. E.On has made a similar pledge in the past, but has yet to announce any price rises.
The Prime Minister David Cameron has promised to ‘roll back’ green levies that fall on energy companies. The Government will make an announcement in the Autumn Statement on 5th December.
How to save on energy
If you want to shield your household from rising energy bills your best bet is a fixed rate tariff.
The longest lasting deal comes from npower with its Price Protector which lasts until December 2017. Alternatively there you could go for the EDF Price Freeeze tariff that lasts until March 2017.
The cheapest fixed rate tariff comes from First Utility with its iSave Fixed v12 which will lock in prices until June 2015.
Below is a roundup of the cheapest fixed rate deals available.
|
Supplier |
Tariff |
Average Cost |
Saving vs. non switcher's typical bill* |
Fixed until |
|
First Utility |
£1,178 |
£242 |
Fixed until June 30, 2015 |
|
|
E.ON |
£1,178 |
£242 |
Fixed for 12 months |
|
|
Green Star Energy |
£1,182 |
£238 |
Fixed for 12 months |
|
|
Green Star Energy |
£1,191 |
£229 |
Fixed for 24 Months |
|
|
Npower |
£1,202 |
£218 |
Fixed until the 30 April 2015 |
*Saving calculated against an average bill as declared by OFGEM, 2013. Prices correct on 12/11/13. Source: Energyhelpline.com
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More on energy:
How to beat the winter energy price rises