Published on 11 Jan 2012 Sections ,

EDF 5 per cent gas price cut ‘overdue’

Consumer groups welcome energy supplier EDF’s decision to cut gas prices by 5 per cent – but should it have been more? An EDF executive defends the decision to Channel 4 News.

EDF cuts gas prices by five per cent (Getty)

On Wednesday the company’s chief executive, Vincent de Rivaz, said: “What customers want more than anything else is fair, clear and transparent prices.

“We know they want action rather than words. That is why we are the first major supplier to announce a cut and were the last to increase prices.”

Last week the small independent supplier Ovo Energy became the first energy firm to cut bills, reducing its gas prices by 5 per cent.

News of the EDF gas price cut comes on the same day as consumer magazine Which? published a consumer satisfaction survey which placed EDF second bottom in a table of the biggest six energy suppliers. Just 43 per cent of EDF customers said they were satisfied with the company’s service or likely to recommend it to others.

Which? Executive Director Richard Lloyd 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.

Today’s announcement comes just two months after EDF increased gas bills by 15.4 per cent because of rising wholesale gas prices.

Mr Lloyd added: “Now the pressure is on for the rest of the major suppliers to follow suit. But as our survey today shows, there remain huge problems with customer service in energy as well as high prices.”

His call was echoed by Energy Secretary Chris Huhne who said “I urge the remaining five large energy suppliers to follow suit and give consumers some respite this winter.”

Adam Scorer, of watchdog Consumer Focus, said: “This is an overdue but nonetheless welcome move.

“The cut is not enormous, given the scale of increases last year, but it creates some important momentum in the market.”

FactCheck: Do energy companies put bills 'up like a rocket and down like a feather'?

Online campaign

Activists from the campaign group 38 Degrees, who on Monday launched an online petition urging the “big six” energy suppliers to drop their prices, had gathered over 61,000 signatures by noon on Wednesday. A spokesman for 38 Degrees, which set a target of 75,000 signatures for its petition, welcomed the EDF price cut but said “the other suppliers need to follow suit”.

British Gas, EDF, E.ON, npower, Scottish Power, and Scottish & Southern all put their prices up in 2011. British Gas, the largest supplier with 10 million customers for gas and electricity, put prices up in August by 18 per cent for gas and 16 per cent for electricity.

In response, the government has emphasised the importance of shopping around for the best energy deals, and it seems that faced with ever rising bills, some consumers are doing just that.

Data from energy regulator Ofgem for 2010, the latest available, show 15 per cent of gas customers and 17 per cent of electricity users switched suppliers. But the price comparison website uSwitch claims the figures for 2011, to be released in March, will be much higher as customers faced two prices rises from each of the suppliers over a year.

However the regulator Ofgem says that around 60 per cent of consumers have never changed their energy supplier.

Campaigners for the poorest households called for more specific action by energy suppliers. Justin Forsyth, Save the Children chief executive, said: “Energy price drops will be welcome news for families struggling to keep their homes warm. But for children living in poverty, a 5 per cent decrease doesn’t go far enough. We need to see targeted help for them.”

Consumer Focus estimates that 6.5m UK households spend more than ten per cent of their household income on energy bills, which is defined as being in fuel poverty. In 2009, there were 5.5m households in the same position.

However, the unseasonably mild weather has proved an unexpected boon for those struggling to heat their homes. Figures released by the National Grid show demand for gas is 20 per cent lower this week compared to the same week in 2010.