ScottishPower fights back against small suppliers

One of the big six energy companies today staged a comeback against the challenge being presented by small suppliers OVO and First:Utility.

ScottishPower has cut the gas prices on its online energy plan by 2% or £23, enabling it to slip into second place behind OVO Energy, and knock First:Utility into third place.

The move is very timely as it stops two small suppliers from dominating the pricing charts. New data released by uSwitch.com shows that small suppliers were beginning to win consumers over. A year ago less than 1% of switchers were choosing energy suppliers who were not one of the big six. But more recently almost three in ten switchers were choosing small players. ScottishPower's move today may have helped to stem a flow that could have led to almost 1.5 million households moving from the big six to a small supplier within a year.

Will Marples, energy expert at uSwitch.com, says: "I'm not surprised that one of the big six has fought back - having two alternative suppliers offering the lowest prices in the market was great news for consumers, but a serious concern for established suppliers. It meant that consumers had a serious choice between going with one of the big six or trying out a smaller player.

"ScottishPower hasn't gone for the kill though - it has out priced First:Utility but left OVO sitting in the top slot as cheapest supplier. This could be a strategic move to see whether £31 a year is enough to persuade consumers to ditch a well known brand in favour of the unknown and it will be interesting to see how consumers react. What we don't know though is how much more ScottishPower can cut prices if today's move doesn't have the desired effect."