Energy News

E.ON and Scottish Power announce energy price cuts

Tuesday 17 January, 2012

By Anthony Hill

Last of the “big six” suppliers drop their standard energy prices.

Energy firms E.ON and Scottish Power have become the last of Britain’s “big six” suppliers to announce they are reducing their prices.

E.ON is dropping its standard electricity rates by 6% while Scottish Power is cutting its gas prices by an average of 5%. The price cuts are effective from Monday 27 February.

Dr Tony Cocker, chief executive of E.ON, said: “Reductions over the last few months in the wholesale price that we pay for our customers' energy have now allowed us to help as many of our customers as possible by cutting our electricity price.”

He said the price drop would benefit 75% of E.ON customers, with an average annual saving of £31. Dr Cocker warned, however, that prices were likely to go back up again at some point in the future. “Most experts agree that global energy prices will continue their long-term rise,” he explained.

Scottish Power also suggested that rising demand for energy would “inevitably” lead to higher costs in the long term. It said that its 5% cut would equate to an average annual saving of £36 for dual fuel and gas-only customers paying by direct debit.

Ann Robinson, from independent switching service uSwitch.com, commented: “Suppliers are focusing their cuts on one fuel, while previous hikes hit both gas and electricity. The fact is that these cuts will not even come close to wiping out last year's eye-watering price hikes.”

Meanwhile, Adam Scorer, from the watchdog Consumer Focus, said it was only fair that energy prices reflect fluctuations in wholesale cost. He added: “We hope this shows suppliers are waking up to the need for customers to see rapid cuts when wholesale prices are low, and that this trend will continue if wholesale costs carry on falling.”