August was a relatively quiet month as far as domestic energy price trends were concerned. Although wholesale gas prices fell by 8% on the month - the first fall in 5 months - there was no movement in either the Standard Variable tariffs of the Big 6, or of the price of the cheapest domestic energy tariff.
Consequently savings from energy switching have stayed flat at £325. This is down from a record high of £378 in March 2016.
Despite the relatively calm background there were some surprising, and potentially worrying, price moves particularly from Co-operative Energy.
Co-operative Energy made 2 notable tariff changes.
Firstly, the price of their cheapest tariff has rocketed by £219 (28%) over the past 2 months from £770 (Co-op Fix for Longer September 2017) to £989 (Co-op Online October 2017).
Secondly, Co-operative Energy announced that they would be increasing the price of their Standard variable tariff (Pioneer) by an average £32 with effect from 1 October 2016. Bearing in mind that the Co-operative Energy standard tariff was never particularly good value to start with, this increase will take their Standard prices above those of all of the Big 6 energy suppliers. The average user on the Co-operative Energy standard tariff will be paying £49 a year more than customers of the Big 6 energy suppliers on standard tariffs. This wasn't supposed to happen for a company that came to market to attack the dominance of the Big 6. It also does not bode well for their aim of saving their customers money.
Is this telling us something about the energy market, or about issues at Co-operative Energy? We suspect the later but time will tell.
As we predicted back in early June 2016 in our note Energy bills have bottomed. Time to switch!, the price of the cheapest energy tariffs bottomed at the beginning of June 2016, and has been rising steadily since. We expect this trend to continue through the rest of 2016.
Joe Malinowski, founder of award winning energy price comparison website TheEnergyShop.com commented.
"Savings from energy switching, at £325 for the average domestic household, are still extremely high by historic standards so mow is a great time bag some incredible savings before prices increase further.""
Joe Malinowski continued;
"It is unusual to find a mid-tier energy supplier offering worse deals than the Standard tariffs of the Big 6, but Co-operative Energy is in that place now. Co-operative Energy customers should cut and run now for a spectacular saving of £374."
Cheapest deal in market as at the first day of the month.
Based on Ofgem average usage profile.
Excludes tariffs with less than 12 months duration
Excludes tariffs that do not have national coverage
Excludes tariffs where payments are taken in advance of the customer coming on supply
Excludes tariffs in controlled market entry