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Ovo Energy pledges an annual energy bill under £1,000 | Ovo Energy pledges an annual energy bill under £1,000 |
(about 2 hours later) | |
Ovo Energy, a small power company, has pledged to bring annual bills down to under £1,000. | Ovo Energy, a small power company, has pledged to bring annual bills down to under £1,000. |
Ovo says that a 9.5% fall in wholesale gas prices over the winter has allowed it to lower prices. | Ovo says that a 9.5% fall in wholesale gas prices over the winter has allowed it to lower prices. |
Its pledge comes just weeks after a competition inquiry was announced into the "big six" energy firms to see if they are hampering competition in the energy market. | Its pledge comes just weeks after a competition inquiry was announced into the "big six" energy firms to see if they are hampering competition in the energy market. |
Ovo's price is based on a dual fuel, medium user paying by direct debit. | Ovo's price is based on a dual fuel, medium user paying by direct debit. |
In the UK, the average annual dual-fuel bill - covering gas and electricity - is about £1,264 per household. | In the UK, the average annual dual-fuel bill - covering gas and electricity - is about £1,264 per household. |
Last month, SSE - one of the big six energy firms - said it would freeze domestic gas and electricity prices at their current levels until 2016. | Last month, SSE - one of the big six energy firms - said it would freeze domestic gas and electricity prices at their current levels until 2016. |
The price of energy has become an important political issue, particularly after several of the big energy firms raised tariffs at the end of last year. | The price of energy has become an important political issue, particularly after several of the big energy firms raised tariffs at the end of last year. |
Last month, a report by regulator Ofgem called for an investigation into the market by the Competition and Markets Authority (CMA). | Last month, a report by regulator Ofgem called for an investigation into the market by the Competition and Markets Authority (CMA). |
The Ofgem report criticised the effectiveness of competition. | The Ofgem report criticised the effectiveness of competition. |
It also found "possible tacit co-ordination" on the size and timing of price rises, but did not accuse the major energy firms of colluding over prices. | It also found "possible tacit co-ordination" on the size and timing of price rises, but did not accuse the major energy firms of colluding over prices. |
Managing director at Ovo Energy, Stephen Fitzpatrick, said: "Competition works. It is the best chance we have of bringing down bills, but we need a better market to make that possible." | Managing director at Ovo Energy, Stephen Fitzpatrick, said: "Competition works. It is the best chance we have of bringing down bills, but we need a better market to make that possible." |
"That means when wholesale prices fall, customers shouldn't see prices being frozen, they should see them falling," he added. | "That means when wholesale prices fall, customers shouldn't see prices being frozen, they should see them falling," he added. |
Customers would have to sign up to a fixed deal to secure the sub-£1,000 Ovo bill. |