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A price war between the six big energy suppliers (British Gas, Scottish & Southern Energy, Scottish Power, E.On, nPower and EDF Energy) means that customers can now switch their accounts to a different provider in exchange for a better deal.
This news is long overdue, especially as prices have remained stubbornly high in recent years despite a drop in wholesale tariffs (up to 50 per cent in 2009). But there is a catch: to benefit, customers must open an online account, where readings are logged and statements are viewed online.
Generally, internet accounts are thought to be £200-£300 cheaper than a standard tariff. If you have not switched suppliers previously you are likely to be on a standard rate, though, if in doubt, check with your provider – they may even match the price of a competitor.
Getting the best deal
Prices are geographically specific, so just because your sister in Leeds, for example, rates X supplier over Y does not automatically mean that electricity supplier will be right for you. Compare electricity prices specific to your region, and review again several months down the line.
Prices can also vary by the type of customer. For example, prices are usually highest for residential and commercial consumers because it costs more to distribute electricity to them.
Industrial consumers, however, use more and can take their electricity at higher voltages, meaning the suppliers do not need to step them down. These factors make the price of power to industrial customers closer to the wholesale price of electricity, and so lower than that received by most domestic users.
Seasonal fluctuations are also significant. Energy prices generally tend to shoot up in the winter, with the average UK household using 40 per cent more energy (gas and electricity combined) than in the summer. Check to see if your rate jumps around this time, and if so, how other companies’ figures compare.
How to switch suppliers
There is now a wealth of websites helping you to compare electricity prices, promising to find you the best deal within minutes. Similarly, some newspapers and business magazines print cost comparison tables, though of course the data published will not be bespoke to you.
It also pays to read the newspapers, particularly while the price war rages. Earlier this month, for example, British Gas cut its prices to make it the cheapest of the ‘big six’. A week later, nPower beat this by slashing prices further. Most policies allow a 14-day cancellation period from date of application so if you think you have nailed the best deal, only then to have it trumped by another, it may not be too late to switch again.
It may also be worth contacting the supplier direct or ask them to email you notifications of any rate change to ensure you are completely up-to-date.
