Energy supplier cancels planned price riseOvo Energy axes plans to increase utility bills
25 November 2011
A small independent energy supplier has cancelled plans to raise customer bills.
Ovo Energy, which has 69,000 customers, announced in October that the cost of its variable rate tariffs would rise by 3.5%.
Today it said that a fall in wholesale costs meant the price rise was no longer going ahead.
No price rise for Ovo customers
The rise, due to come into force on 1 January 2012, would have increased the typical Ovo variable rate bill from £1,120 a year to £1,159.
Around 15% of Ovo’s customers are on the variable rate tariff, which is no longer available to new customers.
Find out how Ovo was rated by its customers in our energy supplier satisfaction survey.
Which? energy policy advisor James Tallack said the move highlighted the difference between small and large energy companies.
'Because small suppliers like Ovo have had to build their customer base from scratch they have by definition a savvier, more active and engaged group of customers and have to be far more responsive to their needs, particularly in the way they price their energy.
Larger household-name suppliers still have many of the customers they picked up when they originally took over the public energy suppliers. These ‘sticky’ customers tend not to switch, even if prices go up, giving bigger firms an advantage over smaller competitors.
Energy watchdog must act
James added: ‘As part of its Retail Market Review, energy regulator Ofgem needs to look at how to level the playing field, and make the current bewildering array of tariffs easy to understand so all consumers - savvy and sticky - can easily compare offers at a glance.'
Find out more about what you can do to help tackle complicated energy tariffs.