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Energy firm boss challenges rivals over price | Energy firm boss challenges rivals over price |
(about 1 hour later) | |
The boss of a small energy company has challenged the industry's big players after announcing a 2.5% price cut for consumers. | The boss of a small energy company has challenged the industry's big players after announcing a 2.5% price cut for consumers. |
Ovo Energy said it had reduced prices four times since September. | Ovo Energy said it had reduced prices four times since September. |
Its chief executive, Stephen Fitzpatrick, said the mild winter had allowed it to cut prices, adding that many customers were paying more than they had to elsewhere. | Its chief executive, Stephen Fitzpatrick, said the mild winter had allowed it to cut prices, adding that many customers were paying more than they had to elsewhere. |
Many small suppliers do not have to pay green levies. | |
But Mr Fitzpatrick denied that this was the key to his company's prices, claiming that the major energy firms had used them as an "excuse" for high bills. | But Mr Fitzpatrick denied that this was the key to his company's prices, claiming that the major energy firms had used them as an "excuse" for high bills. |
"We are about 18% cheaper than the average 'big six' standard tariffs and green levies comprise about 3%," he told the BBC. "And actually this year we are going to have to pay them anyway. | |
"We do a lot of small things better and it all adds up. We are smarter about the way we buy energy." | "We do a lot of small things better and it all adds up. We are smarter about the way we buy energy." |
OFT investigation | OFT investigation |
Another smaller supplier - First Utility - said it was increasing prices on its iSave Everyday tariff by 3.5%. | Another smaller supplier - First Utility - said it was increasing prices on its iSave Everyday tariff by 3.5%. |
However, it said that its price rise would not come into effect until 1 April. | However, it said that its price rise would not come into effect until 1 April. |
Energy companies have been under pressure to reduce prices owing to the falling wholesale cost of energy. | Energy companies have been under pressure to reduce prices owing to the falling wholesale cost of energy. |
Analysts have said that consumers should expect as much as £30 a year off their bill. | Analysts have said that consumers should expect as much as £30 a year off their bill. |
But energy companies responded, saying that they bought their energy over a long period of time, and so would not react to day-to-day fluctuations. | But energy companies responded, saying that they bought their energy over a long period of time, and so would not react to day-to-day fluctuations. |
Energy Secretary Ed Davey has also called on the competition authorities to investigate the profit margins of the major suppliers, although a review into the market is already being carried out by the Office of Fair Trading. | Energy Secretary Ed Davey has also called on the competition authorities to investigate the profit margins of the major suppliers, although a review into the market is already being carried out by the Office of Fair Trading. |
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