Daily Archives: August 21, 2009

Electricity, Energy, Projects, Services, Waste Management

E.ON Fires Latest Salvo in Online Price War

E.ON has launched a new fixed price online energy plan – FixOnline 3 – which allows consumers to fix their prices until 1st December, 2010. The plan is only available to those who will manage their account online and pay by monthly direct debit. In return, they will be paying the second lowest energy prices currently available in the market and will only be paying £1 more than if they were on the cheapest plan in the market.

E.ON’s new plan averages out at £984 a year, while EDF Energy’s average bill size comes in at £983. However, EDF Energy’s plan is only available in 10 out of 14 energy regions, which means that many households, including those in London, will not be able to benefit. E.ON, and British Gas which brought out a new competitive online plan only yesterday, will be able to target those areas missing out.

With suppliers cutting online prices, hopes are that it will encourage consumers to start paying by direct debit again. New uSwitch.com data revealed a 7.3% decline in the number of switchers opting to pay by direct debit. If the trend continues, it could result in 342,000 households ditching direct debits this year – and losing £33.5 million in discounts on their energy bills as a result.

Will Marples, energy expert at uSwitch.com, says: “To see two of the big six suppliers launch competitive new energy plans in as many days is great news both for consumers and the market. The price war is injecting new life into the market and making consumers sit up and take note. If they take advantage of the lower prices now available it will help them to manage their energy costs going forward.

“If consumers want to benefit they need to ditch their expensive standard plans and move to one of the new online energy plans. The average standard plan is £1,239 a year while the average online plan is now £1,015 a year – this is an easy saving of £224 a year for the average household. With winter fast approaching, it’s a saving households should definitely be looking to make.”

Via EPR Network
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Electricity, Energy, Projects, Services, Waste Management

Direct Debit Fears Could Cost Consumers £33.5 Million

Ofgem is being urged to act quickly to stem the flow of consumers ditching direct debits and opting to pay energy bills by cash or cheque instead. New data f r o m uSwitch.com, the independent price comparison and switching service, shows a 7.3% drop in the number of switchers paying by fixed monthly direct debit, falling f r o m 92% a year ago to 85.3% today. Across the market it could mean 342,000 households less a year taking up the option and losing out on discounts totalling £33.5 million as a result.

According to Ofgem, over 40% of customers pay their energy bills by direct debit. Not only is this payment method convenient, but it is cheaper too as suppliers give discounts to customers paying in this way. These amount to £98 a year on average. The impact on household bills is noticeable – while the average household energy bill for a customer on a standard plan paying by cash or cheque is £1,239, this drops to £1,141 on average for those paying by direct debit.

More importantly, paying by direct debit is the gateway to suppliers’ cheapest tariffs – these can be found on their online energy plans. To get them, consumers need to pay by direct debit. The average household energy bill for an online customer is £1,021 – £218 cheaper than for a customer on a standard plan paying by cash or cheque.

But despite the cost implications, consumers are starting to shun direct debits. According to uSwitch.com this stems back to last year’s 42% or £381 price hikes which only hit many direct debit customers this year. Almost a third (30%) only had their direct debits increased in the first three months of this year – even though the price increases happened last year. As a result, many were playing catch up to make up for months of under paying and so were shocked when their supplier advised them how much their direct debit had to be adjusted by to compensate.

Not surprisingly, when advised of increases to direct debits a third of people (33%) felt compelled to contact their supplier. Following this 4% cancelled their direct debit even though this would increase the cost of their energy. And they’re not alone – according to the new data there has also been a 217% increase in people choosing prepayment meters (up f r o m 0.6% to 1.9%) and a 106% increase in people choosing variable direct debits – up f r o m 1.6% to 3.3%. In total, these shifts in payment methods could see 351,900 households paying more for their energy than they need to this year.

“Paying by direct debit opens the path to the cheapest energy prices in the market – this is not something to give up without a fight. If you are worried about the amount you are paying, contact your supplier to find out whether the monthly payment can be lowered. Make sure you are paying the lowest possible price for your energy by shopping around, cut down on the amount of energy you use and make sure you or your supplier is taking regular meter readings. Above all, be aware that coming off fixed monthly direct debit and paying by cash, cheque or variable direct debit will cost you money. This should always be a last resort.”

Via EPR Network
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Electricity, Energy, Projects, Services, Waste Management

British Gas Fights Back in Online Price War

British Gas has launched a new online energy plan, finally stepping into the price war that lost it its crown as Britain’s cheapest supplier. However, it hasn’t made an all out bid to reclaim its title. Instead it has gone for a tactical approach, hitting EDF Energy in its ‘home’ regions – the areas where it is the incumbent supplier.

British Gas’ new Websaver 4 energy plan averages out at £994 a year, while EDF Energy’s average bill size comes in at £983. However, EDF Energy’s plan is only available in 10 out of 14 energy regions, which means that many households, including those in London, will not be able to benefit. British Gas, by making its new plan available in all areas, will be able to target those areas missing out. Its new plan is also available to existing customers.

The online price war is also proving very timely for consumers coming off fixed price energy plans this year. With the potential for further price cuts and online prices currently so competitive, these are being urged to think carefully before fixing again as they could incur an exit penalty if they change their mind at a later date.

Will Marples, energy expert at uSwitch.com, says: “This is another shot in the price war – but it certainly isn’t the final one. It will shake things up, but we are certain to see other suppliers making moves of their own. This is great news for consumers who are starting to see some very competitive energy prices coming onto the market which, if they take advantage, will help them to manage their energy costs going forward.

“If consumers want to benefit they need to ditch their expensive standard plans and move to one of the new online energy plans. The average standard plan is £1,239 a year while the average online plan is now £1,021 a year – this is an easy saving of £218 a year for the average household. With winter fast approaching, it’s a saving households should definitely be looking to make.”

Via EPR Network
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