Hefty £200 price hike hits first utility customers 1st June

First Utility iSave v12 customers are being warned to brace themselves for a hefty £200 price hike when the company moves them to a more expensive tariff on the 1 June.

The 18.6% increase will see the average bill for these customers leap from £1,054 a year to £1,250 a year - an eye-watering £196 a year higher, says uSwitch.com, the independent price comparison and switching service.
 
At £1,250 a year these customers will no longer be on a ‘best buy' and will in fact be paying only £15 a year less on average than if they were on a big six standard direct debit tariff. Those who are unhappy about this are being urged to shop around as there are other highly competitive deals available on the market, including some cracking fixed price tariffs which allow households to enjoy a competitive price today, coupled with longer-term price protection.
 
Some of these fixed price tariffs also don't carry any exit penalties, which means that consumers can have the best of both worlds - they can enjoy price protection, but if prices start to fall and the plan no longer looks so attractive they can ditch it and move on without having to pay a penalty.
 
The most notable of these are EDF Energy's Blue + Price Promise February 2015 and npower's Price Fix September 2016. EDF Energy's ‘Blue' expires at the end of February 2015 and costs £1,192 a year. This is £58 a year cheaper than the price First Utility customers will be paying after the hike kicks in, but also protects against any future price increases for the next two winters.
 
npower's Price Fix September 2016 offers the longest price protection on the market - the fix expires 30th September, 2016. However, it costs £1,318 a year, which means that First Utility customers would be paying £68 a year more on average for their energy on this plan, although some may think the premium is OK for the long-term peace of mind it offers.
 
However, many iSave customers will simply be looking for the cheapest available tariff. At the moment this is Flow Energy's Thames Fixed Online September 2014, at £1,135 a year. It offers price protection until 31st August, 2014, and a saving of £115 a year. However, it does have exit penalties of £30 per fuel if cancelled before the end date and requires upfront payment of direct debits - you pay in advance rather than in arrears like you do with other suppliers.
 
For those who are happy to take their chances with future price hikes, the cheapest variable priced plan is SSE's Discount Energy Bonus October 2014. At £1,146 a year this is £104 a year cheaper than the price v12 customers will be paying.
 
Interestingly, First Utility itself also has a cheaper plan on the market - iSave v15 - which at £1,199 a year is £51 a year cheaper than the price it will be charging its erstwhile v12 customers. The good news is that it will also allow existing customers to switch to the cheaper plan without any penalty.
 
Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "This price hike will be a blow to First Utility's customers. While some may be happy to swallow the increase, many more will be looking to protect themselves by jumping ship to a more competitive provider. If they haven't already done so, they should be shopping around now.
 
"Thankfully, there are plenty of options available, including some attractive longer-term fixed price deals that don't have any exit penalties attached. Given that they are currently experiencing a price hike, the idea of this no-strings-attached protection, especially if it comes at a lower price, could be very appealing to these customers."