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Green levies shakeup brings energy bills down

By Katie Anderson on January 7, 2014

Following the Government’s shakeup of green levies announced last month, both British Gas and Scottish Power have cut or plan to cut customers dual fuel energy bills, with others to follow as we progress further into the new year. 

On January 1st the country’s biggest energy provider, British Gas, implemented a 3.2% price cut following its November price hike. The reduction provided a little relief to customers already hit by a 10.4% increase in electricity bills and a 8.4% rise in gas bills.

Customers will enjoy an annual saving of around £41 off their dual fuel bills. In addition after applying the Government’s warm home discount rebate of £12, householders are looking at total savings of around £53 annually. All customers are to benefit from the price reduction, regardless of whether they are on fixed or variable energy tariffs. Average yearly gas and electricity bills will fall to £1,241.

Following in British Gas’s footsteps, Scottish Power will cut their dual fuel energy prices by 3.3% on January 31st. Around 2.2 million households whose energy is provided by Scottish Power will see their annual energy costs fall by around £42, taking the average bill down to £1,199 for customers paying by direct debit. An additional saving of £12 will also be applied to bills, in light of the warm home discount scheme. In December Scottish Power energy bills increased by 9% and 8% for electricity and gas respectively.

Scottish Power  says it is hoping to avoid any further price hikes in 2014, but this will be dependent on cost increases outside of its control, including wholesale energy price increases.

Other members of the Big Six including SSE and npower also intend to introduce similar cuts. SSE plans to introduce a tariff reduction of around 4% before the end of March, which would mean a saving in the region of £50 annually. Although npower is equally commited to price reductions, the company has yet to confirm numbers. The energy provider has stated that there will be no tariff rises before spring 2015, subject of course to network charges or increases in wholesale energy costs.

E.ON and EDF customers saw energy costs rise by on average 3.7% and 3.9%. Lower than the rest of the Big Six, the price increases already took into account future levy changes.

At the beginning of December the Government announced plans to scale back the Energy Company Obligation, a scheme introduced to help vulnerable households lower their energy bills by providing grants for energy saving home improvements including loft and cavity wall insulation and boiler replacements. Instead of taking two years energy companies will now have four years to fulfill their obligations.