EDF ‘throws first punch’ in energy price war

EXPERTS are predicting an “energy price war” as pressure mounts on the Big Six providers following an announcement by EDF Energy that it will slash its gas prices by 5 per cent.

The firm said the cut meant its standard dual-fuel tariff would be the cheapest on the market – but the typical cost for households is still £166 or 16 per cent higher than EDF’s average bill of £1,037 in September 2010.

EDF’s move comes shortly after smaller companies Ovo and Co-operative Energy announced plans to cut their prices.

Consumer groups welcomed the cut, but pointed to the round of price rises last autumn.

“EDF has thrown the first punch in the energy price war to come,” said Mark Todd, director of the independent price comparison service Energyhelpline.com. “The reduction is less than expected, but it is quicker, and for that millions of homeowners concerned about winter bills will be relieved.”

Overall, suppliers put prices up in the past 18 months by 21 per cent – or an average of £224 – adding £2.24 billion on to household energy bills. The latest cut will mean that bills of EDF Energy customers on a dual-fuel tariff will drop from £1,241 to £1,203.

Richard Lloyd, executive director of consumer organisation Which? said: “This gas price cut will be welcome news for millions of consumers with already squeezed household budgets. But it follows a hike of 15 per cent last November.

“Now the pressure is on for the rest of the major suppliers to follow suit.”

Ann Robinson, director of consumer policy at uSwitch.com, added: “Pressure to cut prices has been mounting, and now one of Britain’s biggest energy suppliers has let the cork out of the bottle.

It’s good news for consumers, but look through the fizz and the bubbles and we’re left with the cold reality that prices are still substantially higher than they were just over a year ago.”