Scottish and Southern Energy reduces tariff

Scottish and Southern Energy has only partly delivered on its promise to consumers, competitors and the market to ‘blow them out of the water’ with today’s price cuts, says uSwitch.com, the independent, online switching and comparison service.

The energy provider, with around 7 million customers, was consistently throughout 2006 the cheapest dual fuel provider and now looks set to continue. Its price reductions of 12% for gas and 5% for electricity will put £88 back into its customers’ pockets. The cuts are due to start on 1st March, compared with 12th March (British Gas) and 30 April (npower and Powergen). However, both npower and Powergen made their new online tariffs immediately available to new customers.

Geoff Slaughter, Energy Product Manager at uSwitch.com, says: “Scottish and Southern Energy has played the role of the ‘good guy’ in the energy market for some time now due to its winning formula of the cheapest prices coupled with the best service. It has a consumer-friendly reputation to live up to, which is why everybody sat up and took note when it said its price cuts would blow us away.

“But it has only partly delivered – while its new standard tariffs have rocked British Gas, npower and Powergen back down the cheapest supplier table, it is simply playing follow-my-leader with its online tariffs, undercutting npower by only 48p. Hopefully this won’t set the pattern of future online cuts, where energy suppliers snip a few pence off here and there without really setting themselves apart from the others.

“But consumers will welcome the changes it has made to its standard tariffs. Even when British Gas momentarily became cheapest with its recent price cuts it was still only £9 cheaper than Scottish and Southern Energy. Now, the tables have turned and Scottish and Southern Energy is £79 cheaper than British Gas.

“We can still expect a bit of jostling from the other suppliers but, given Scottish and Southern Energy’s track record of giving value for money, I would have no hesitation in saying that this is the move we’ve been waiting for and the time to switch is now.”

Scottish and Southern Energy has a reputation for treating its customers fairly. In January it increased its early payment discount, rewarding customers paying their energy bills within 10 days with a 4.3% discount. This move contrasted sharply with British Gas, which introduced a fine for late-paying customers. In addition, Scottish and Southern Energy was voted best supplier by consumers in uSwitch’s last two independent Customer Satisfaction Reports.

Its move today follows swiftly on the heels of Powergen’s announcement yesterday, where it said it was going to cut standard prices by 16% or £103 for gas and 5% or £20 for electricity. Powergen’s average fuel bill will fall from £1,005 to £913, so it was set to be the cheapest dual fuel supplier. But only one day later it has lost out to Scottish and Southern Energy.

Only two of the Big 6 providers have yet to announce a price cut – EDF Energy and ScottishPower. British Gas has also hinted that it may have some more price cuts up its sleeve.

Other Scottish and Southern Energy key facts:

The last time it put prices up was 1st January 2007. Today’s move means that customers will have only been on the higher rate for gas for 59 days and electricity for 90 days

It put its energy bills up by 42% since 1st January 2006, which equated to £284. Today’s announcement wipes out 31% or £88 of these rise(s)

To pass on the full reduction in wholesale gas prices over the last 12 months it needed to reduce its prices by 25.8% for gas and 16.39% for electricity

How the energy war has shaped up:

Feb 8 - British Gas becomes cheapest provider as it announces price cuts effective 12th March – 17% for gas and 11% for electricity

Feb 15 - Powergen sticks its toe in the water with 4 new products, but balks at full-blown price cuts for its 6 million customers

Feb 16 - British Gas hits back a day later with second price cut, but only to its online tariff: it remains cheapest provider by £5

Feb 19 - npower wades in, lowering energy bills by 16% for gas and 3% for electricity for its 6.8 million customers, stealing British Gas’ cheapest provider crown

Feb 23 – ScottishPower edges towards the battlefield with a new capped product - but holds back from cutting prices. Capped Price Online is the cheapest capped product currently available - £66 or 7% cheaper than Scottish Power’s standard tariff

Feb 27 – Powergen cuts bills by 16% for gas and 5% for electricity making it £39 cheaper annually than British Gas and £6 cheaper than npower for dual fuel. However, npower remains cheaper online by only £1

Feb 28 – Scottish and Southern Energy ups the ante, cutting bills by 12% for gas and 5% for electricity making them £79 cheaper than British Gas, £46 cheaper than npower and £40 cheaper than Powergen for dual fuel. Price cuts also kick-in from 1st March - earlier than all three rivals.