15 JANUARY 2015: After a downturn in wholesale commodity costs over the past few months, OVO will once again be decreasing prices. Today’s 5.5% drop represents a saving of £53 a year¹.
This is OVO’s 8th price decrease in 15 months², during which time the independent supplier has been (on average) 15.2% cheaper than the average Big Six Standard Variable Tariff³.
The move will affect new and renewing customers only, on OVO’s 12 month pay-monthly fixed tariffs (Better Energy and Greener Energy). Renewing customers will save around £121 on the price at which they joined OVO this time last year4, and new customers will save around £255 against an average Big Six Standard Variable Tariff today5.
Following the price drop, OVO’s price for a dual fuel customer will now be £9206.
OVO reviews its prices on a regular basis and this price change largely reflects movement in the cost of supplying energy to its customers over time. This cost reflective pricing sits at the heart of the company’s promise to customers that the deal they are getting from OVO will always be fair, transparent and as competitive as possible.
OVO has also reduced its Standing Charge from £100 to £90 (pre VAT) for these tariffs as part of its promise to treat customers fairly and accurately reflect the cost of doing business in its bills.
Stephen Fitzpatrick, CEO at OVO said: “Our track record for passing on savings to our customers speaks for itself. Last year we were the first energy supplier to bring bills under £1,000 and over the past 15 months we have reduced our prices eight times. During that time, OVO has consistently been in the top ten cheapest suppliers in the UK, regularly in the top five and on average 15.2% cheaper than the Big Six.”
The decrease takes effect at 00.01 on 15 January 2015.
OVO operates using a cost reflective pricing model meaning the prices it charges broadly reflect the natural movement of the cost of supplying energy. This means prices can go up as well as down. OVO is always honest and transparent about its price changes and the reasons behind them.
Today’s price decrease is on OVO’s fixed pay-monthly Better and Greener energy plans. OVO’s Standard Variable Tariff (Simpler) will not change at this time. Only around 14% of OVO’s customers are on a Standard Variable Tariff - which is consistently ranked in the top five cheapest Standard Variable Tariffs in the UK7 - in comparison to 60-80% of Big Six customers8.
Price comparisons are made using OVO’s cheapest non-Economy 7 dual-fuel tariff at the relevant time (including all available discounts, paying by direct debit in advance and averaged over all available regions) compared to an average of the Big Six Standard Variable Dual-fuel Tariffs (excluding online discounts, using a variety of payment methods including direct debit and averaged over all available regions).
All prices averaged over 52 weeks from 19/01/2014 and based on a medium user (3200 kWh electricity, 13500 kWh gas). Inclusive of VAT.
The “Big Six” are E.ON, SSE, British Gas, Scottish Power, Npower and EDF.
1Compared to our current average medium use non-Economy 7, better online.
2OVO’s historic price changes overthe last 12 months include six drops and one increase.
3OVO was on average 15.2% cheaper than the average Big Six Standard Variable Tariff over the last 12 months. This is an average difference in price of £180. These numbers come from a weekly comparison (on a Sunday) between OVO’s average cheapest available tariff for a medium PC1 user and the average Big 6’s Standard Variable tariff at the same consumption. All prices averaged over 52 weeks from 19/01/2014 and based on a medium user (3200 kWh electricity, 13500 kWh gas). Inclusive of VAT.
4Using OVO’s cheapest non-Economy 7 tariff in January 2014 compared to OVO’s cheapest non-Economy 7 tariff on 15 Jan 2015 following today’s price drop. – this comparison looks at the average medium non-Economy 7 price between 23/12/2013 and 13/02/2014.
5OVO “Better” fixed tariff with effect from 14/01/15 for a non-economy-7, dual-fuel, medium user (3200 kWhs elec. and 13500 kWhs gas) paying monthly in advance by direct debit, including online discount. Comparisons made against the average of the Big 6 standard variable tariffs with equivalent features - cheaper tariffs may be available. Incl VAT. Actual savings may vary according to your current tariff, OVO tariff options, consumption and location. Savings made over a year. “The Big 6” are British Gas, Scottish Power, SSE, Npower, E.ON and EDF. You will have 14 days to cancel your contract.
6£920 is the annual cost of OVO’s Better tariff for a dual-fuel medium user (3200 kWh electricity, 13,500 kWh gas) paying in advance by direct debit, including all available discounts and VAT, when averaged over the regions in which that tariff is available. Effective 15/01/15.
7According to EnergyLinx and UK Power tables based on medium usage.
8UK Utilities: What To Expect from the CMA Investigation on Energy Retail ? - The Detailed Low-down, BernsteinResearch, 28 Oct 2014