EDF Energy customers won’t wait to benefit from Government action on energy charges
- EDF Energy held back impact of rising ECO costs ahead of today’s announcement
- 3.9% rise was less than half the increase of many major competitors
- Typical bills still cheaper than competitors who announced reductions today
- Customers to get £12 Warm Home Discount rebate worth around 1% of bill
EDF Energy customers will not have to wait to benefit from changes to ECO charges announced by the Government. Unlike most other companies EDF Energy held down the impact of these rising costs in advance. This means customers can be certain they are already receiving the benefit of today‘s ECO changes in full.
In addition, 3.6m EDF Energy customers will receive a £12 rebate following the Government’s decision to move the Warm Home Discount into general taxation.
Customers from some competitors will have already started paying higher prices and must wait to see if they will be refunded following today’s changes. Others will have to wait until their supplier announces its pricing plans to find out if and when they will get a reduction.
EDF Energy announced last month that it was holding back the full impact of rising costs and limiting its price rise to 3.9% - less than half the increases announced by competitors at the time. It was able to lessen the impact of higher charges in advance because it was confident that action could be taken to reduce costs.
Prices
EDF Energy has already said that it does not expect to increase prices further in 2014. Its new prices, which come into effect on January 3, will cost on average £1,300, for a typical dual fuel customer paying by direct debit.[i]
EDF Energy CEO Vincent de Rivaz said: “We did something different because we thought it was important to protect our customers from the full impact of rising costs.
“That decision means that EDF Energy customers get the full benefit of changes made today without the need to wait for us to take further action. Our action has been validated by the Government’s announcement, but it is not the end of the story. There is more that can be done to bear down on rising costs. I have made further proposals which will help customers without compromising on our long term social and environmental ambitions. “
Further savings possible
Vincent de Rivaz first made proposals for policy-makers and energy companies to work together to bear down on costs on October 8. Today’s announcement represents an important first step in that process, but there is more that can be done beyond 2014.
EDF Energy has outlined further proposals for savings:
- EDF Energy believes it can use its growing experience in delivering the ECO programme to make it more cost effective in future years.
- The company believes that a comprehensive review of the smart meter programme could save £1.8bn. For example, the programme targets 100% of homes, including those that are hard and expensive to reach. Reducing the target to 80% by 2020 would be more effective and affordable for customers. Reconsidering the obligation to provide an in home display would also save money.
- Government and the regulator should work with transmission and distribution companies to see what can be done to limit the impact of network investment on future bills.
EDF Energy had the cheapest standard dual fuel direct debit prices of the major suppliers for all but three weeks in 2013[ii] and its Blue fixed priced deals come without exit fees – meaning customers can leave for free at any time.
The company remains committed to helping vulnerable customers and has been on track in delivering its ECO target. Less than a third of the way through the delivery timetable, EDF Energy had completed 34% of its overall ECO target.[iii]
Eligible low income customers can also benefit from the company's Trust Fund which has paid grants to 26,000 people to help clear household debts and a free money advice service run by the Citizens Advice Bureau.
In addition the Warm Home Discount worth £135 is expected to benefit 246,000 EDF Energy customers in 2014/5, an annual increase of 34%.
Ends
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Footnotes
[i] Based on a national average of regional prices for dual fuel customers with typical consumption and paying by monthly direct debit. Typical consumption as defined by Ofgem is 3,300 kWh electricity and16,500 kWh gas consumption and 5,000 kWh of electricity for Economy 7 meters.
[ii] This figure is based on a national average of regional prices for customers with typical consumption and paying by monthly direct debit. Typical consumption as currently defined by Ofgem is 3,300 kWh standard electricity and16,500 kWh gas consumption and 5,000 kWh of electricity for Economy 7 meters. Ofgem have recently reviewed the typical domestic consumption value and from the 1 January 2014 a new reduced value will be used; 13,500kWh gas and 3,200kWh standard electricity. Major suppliers are: British Gas, SSE, Scottish Power, Npower and E.ON.
[iii] As detailed within Ofgem’s Quarterly Annex: Energy Company Progress published on the November 8, EDF Energy is well placed to deliver its ECO targets. Based on weighted assumptions between programmes, as at the end of August 2013, EDF Energy was 34% complete against the ECO at a point whereby 30% of allowable time had elapsed.