You’ve probably seen that a number of energy companies have put their prices up in recent months citing an increase in external costs. We regretfully now need to also increase the price of our First Variable tariff as a result of the same increases in costs.
Wholesale prices have increased by 9% in the past year, and we’ve seen a 30% increase in the costs we are obligated to pay towards government policies that support low-carbon generation and better energy efficiency.
We’ve always stood for fair and responsible pricing. That means passing on savings to customers when costs drop, but it also unfortunately means we need to increase prices when our costs rise.
These costs are all external and we sadly have no control over them. They break down as follows:
|External cost element (inc. VAT)||Year on year Increase|
|Wholesale gas and electricity cost (40% of the bill)
The price paid on the wholesale energy market to buy the energy used by our customers (based on a one year forward hedge)
|Industry policy costs (18% of the bill)
Costs to support renewable energy, efficiency schemes, smart meter programme and help vulnerable customers
|Network costs (26% of the bill)
Costs paid to maintain the pipes and wires that get energy to your home
|Total external cost increase per a typical dual fuel customer||9.2%|
|First Utility cost absorption||-3.3%|
|First Variable customer bill increase||5.9%|
Note: These costs relate to dual fuel, national average costs at Ofgem typical usage comparing the calendar years 2017 to 2018.
The increase will only affect 20% of our customers, those who are on our First Variable tariff which has no exit fees, meaning you can switch to another tariff or supplier at no extra cost.
The majority of our customers are on a fixed-price plan and will not be affected by this change and will not see adjustments to their energy bill.
How to reduce your energy bill
For those customers who are due to receive a price increase, our advice is to move onto one of our fixed-price tariffs. We offer a selection of great value fixed tariffs that provide peace of mind by fixing prices for up to three years, irrespective of any market changes. There is also no cost to switch to one of these plans.
Our commitment to fair and low pricing continues
We don’t take price changes lightly, which is why we do all we can to be as transparent as possible to help our customers get the best value. If you are affected by this price change and have any other questions,we’re here to help. Feel free to give us a call on 01926 320 142, we’re here from 8am to 8pm on weekdays and 9am to 4pm on Saturdays.