After several small skirmishes among the six biggest energy companies, the price war has now begun in earnest.
Scottish Power had been trailing behind its competitors with its best tariff coming fifth among the Big Six and seventh overall.
Now its new Online Energy Saver 7 tariff has soared up the league table, with an average annual bill of just £975.14. The move comes just one day after Eon dropped the cost of its FixOnline V3 tariff to £981.14.
|
Provider |
Online |
|
First Utility |
£964.99
Smart Online Saver v1
|
|
Scottish Power |
£975.14
Online Energy Saver 7
|
|
Ovo Energy |
£978.67
Standard |
|
Eon |
£981.14
Fix Online v3 |
|
EDF Energy |
£982.49
Online v5 |
|
British Gas |
£993.56
WebSaver 4 |
|
Scottish & Southern |
£1,009.52
Go Direct |
|
npower |
£1,018.54
Web 16
|
The tariff is limited and you have to lock in until November next year - there's a £50 fee if you exit before then.
September savings
September has been an eventful month for energy consumers, with the entry of two giant-beating newcomers - First Utility and Ovo Energy - into the market. At an average of £978.67 a year, Ovo Energy has now been overtaken by Scottish Power - but First Utility keeps its lead at just £964.99.
People use the most energy during the colder autumn and winter months, so providers are anxious to sign them up before the temperature plummets.
Scott Byrom, utilities expert at moneysupermarket.com, welcomed the news, saying: "With autumn nights drawing in and winter energy bills looming, any kind of saving is great for UK bill payers."
He added: "It seems we now have a price war on our hands... It should only be a matter of time before the other energy giants show their hands.
"We may see British Gas make a bold move to claim the top spot in the energy market. It really is a case of watch this space as this is potentially the tip of the iceberg with more attempts to claim the crown of the 'UK's Cheapest Energy Provider' to come."
Let's switch again
This move by Scottish Power will be welcomed by bill payers but it highlights the need to switch tariffs if you're on an uncompetitive deal.
For example, if you are on its standard tariff, you'll be paying an average bill of £1,361.95 a year. That means failing to switch could cost you £386.81! That's a pretty high price to pay for apathy.
Did you lock into a fixed tariff last year, back when the energy prices were going through the roof?
There are four popular fixed tariffs coming to an end soon. EDF's Price Freeze 2009 and Scottish Power's Fixed Price Energy Oct 2009 finish at the end of the month, while E.ON's Price Protection v16 and v17 expire on the first of October. This price war couldn't have come at a better time.
Move quickly, though, as otherwise you could be automatically moved onto your provider's standard rate.
Scott explained: "This is good news for those on EDF's Price Freeze 2009 as they may see their bills decrease by £21 a year, however, for those on Scottish Power's Fixed Price Energy Oct 2009 and E.ON's Price Protection v16 and v17, customers could see their bills jump by £56 a year on average."
When to switch?
Timing is key in order to avoid paying more than you need to - leave a fixed rate too early and you could be hit with termination fees.
However, move too late and you risk being moved to a much less competitive deal.
Ideally, customers whose fixed rates expire in the near future should start looking to swap four weeks before their termination date if they want to avoid being automatically shunted onto a more expensive tariff.
"These customers should now be scouring the market for the next best alternative to avoid paying over the odds," Scott recommended.
Please note: Any rates or deals mentioned in this article were available at the time of writing.
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