Powergen fires first volley in regional energy price war

Following Powergen’s announcement last week of price drops for its online electricity and dual fuel tariffs, the energy supplier which has over nine million gas and electricity accounts nationwide today made the unprecedented move of offering varied discounts across UK energy regions.

moneysupermarket.com, the price comparison website, believes this move could spark a regional price war between providers keen to increase market share while preserving profit margins.

Paul Schofield, head of utilities at moneysupermarket.com said: “In a move which suggests the supplier feels unable to compete with British Gas’ price cuts across the board, Powergen has clearly taken a strategic decision to target specific regions with significantly higher discounts for its online tariffs. For example, Powergen is offering online dual fuel customers in the London area a 17 per cent overall discount making them the capital’s cheapest provider, but only offering customers in the East Midlands a 7.6 per cent discount, meaning they remain as the most expensive of the big providers in this region.”

Paul Schofield said: “This is a fascinating reaction to the gauntlet laid down by British Gas last week, and we believe Powergen’s regional approach could trigger similar moves from other suppliers. We do not feel however that this is any substitute for passing on actual unit price improvements to all customers following huge reductions in wholesale gas prices since last summer. We continue to urge long-suffering customers to shop around for the best deal on their individual energy needs.”

moneysupermarket.com is making a stand to help these people ditch their expensive power companies and get the cheapest energy deal by offering £30 cash-back to all customers swapping to a dual fuel tariff through its service. Those not going for a dual fuel tariff but changing a provider or tariff will benefit from a single £17.50 payment.