One of the questions we are often asked at this time of year is whether there will be suppliers that raise their standard tariffs ahead of winter. It is a question with a very serious edge as energy bills remain a big financial worry for many at home (and also in business as we were reminded recently by the failure of Teesside steelmaker SSI).
With more than a touch of black comedy, once we believe there could be increases on the way, the next thing to do is to work out timing. If prices are to be increased, the new rates need to be in force for the clock change at the end of October. Now that they have to give 30 days notice of price changes, any companies looking to make a move would have to speak up during party conference season. They run the risk of negative headlines attracting political attention and a direct response from the conferences—in September 2013 we had Ed Miliband's price freeze pledge as speculation mounted (rightly as it turned out) that we were set to see a round of price hikes. Perhaps to try to minimise these headlines we have seen increases announced late on Fridays—after specialist business journalists have gone to the pub (or wherever else they go) for the weekend—and, a particular favourite, on days of big developments like 15 October 2012 when Scottish Power announced a price increase, and the Edinburgh agreement paving the way for the Scottish independence referendum was signed.
This year though sliding wholesale prices mean there is no need for energy suppliers to manage bad news on prices. In fact the news has been rather better. British Gas has cut its standard gas tariff twice this year by 5% each time and the other major suppliers have all cut these schedules at least once.
The market for online fixed tariffs has been dynamic throughout 2015. Our latest monthly domestic tariff report shows continuing competition in the market for one year online fixed deals from both major suppliers and independents, driving tariffs down towards the £800/year market (for an average dual fuel consumer on Ofgem's new lower typical domestic consumption values). In the run up to winter, EDF Energy has joined the fray for the first time in 2015 releasing a competitive one year fixed deal, while Scottish Power has responded with a price reduction on its one year fix, the latter retaining its position as the cheapest major supplier. In the top 10 cheapest deals, independent suppliers continue to hold their own with new suppliers such as Nottingham City Council's Robin Hood Energy offering both regional and nationally competitive deals.
However, while the fight continues in fixed term contracts, GB Energy continues to undercut the online market with its variable deal currently priced below them on an annualised basis (as a variable tariff, its rates could change in the coming months). Collective switching provides another option, used predominantly by E.ON UK and First:Utility, although a recent move from Good Energy has seen wide media coverage of its renewable collective switch. How many of those that registered actually switch, however, is another question.
This year at least energy suppliers have a good story to tell on tariffs. Whether consumers respond to this good news and make changes to their deals is of course another question.