Energy News

Ovo Energy increases prices - for new customers

Thursday 27 October, 2011

By Martin Fagan

Energy tiddler announces 6.2% price hike for new fixed-rate customers

Ovo Energy has announced it will increase its dual fuel energy tariff for new customers by 6.2%.

The price rise will take immediate effect and means new customers signing up to one of Ovo’s dual fuel tariffs will pay an average £1,115.62 per annum. The company's existing 55,000 fixed-rate customers will not be affected.

To further simplify its tariffs, the company is also discontinuing variable rate tariffs for new customers who will now only be offered two fixed-rate tariffs - OVO New Energy Fixed and OVO Green Energy Fixed tariffs.

For existing variable rate tariff customers, who represent 12% of its total customer base, Ovo also said it would be implementing a rise of 3.5%, which will come into force on 1 January, 2012.

Ovo’s price increase follows on from the “big six” energy companies all raising their energy prices over the summer by an average of 17.4% for gas and 10.8% for electricity.

In August, Ovo bucked the trend of the larger energy companies on price increases by offsetting an increase of 5.49% in its electricity costs with a surprise 3% reduction in gas prices.

"Unfortunately, we're now in a position where we must implement a small rise to our tariffs to reflect the higher wholesale rates we're paying," said Stephen Fitzpatrick, managing director at Ovo.

Commenting on Ovo’s price increase, Adam Scorer, director of external affairs at watchdog Consumer Focus, said: “Ovo customers will be disappointed but not shocked by this announcement. An energy price rise is always unwelcome news, but this is lower and later than other suppliers’ increases.

“The question many customers of bigger suppliers will be asking is ‘if such a small firm can make smaller increases, why can’t the big players?’”

Ovo Energy is the newest entrant to the energy market, launching in September 2009 with a promise of simple and easy to understand energy tariffs. It topped the Which? customer satisfaction survey of energy companies with a score of 77%, sharing the top spot with another small energy company, Utility Warehouse.