EDF Energy is holding back rising costs, including from the Government’s ECO social and environmental scheme in order to limit price rises for customers. The company recognises that a price rise is especially unwelcome in the current economic climate, but believes that today’s action to limit the growth of bills is an important step.
It means the company’s new average standard variable price – which will be effective from January 3, 2014 – will now be £1,300, a rise of £49 a year. EDF Energy’s new standard variable price will be between £80 and £96 lower than competitors who have recently announced price increases.
The company has taken action ahead of the outcome of the Government’s review of the costs of ECO and other schemes. If the Government makes bigger changes to the costs of its social and environmental schemes than EDF Energy has anticipated, the company pledges to pass these savings onto customers. However, if changes to social and environmental programmes are less than anticipated, the company may have to review its standard variable prices again.
EDF Energy is working with policy-makers to look at ways in which the full range of environmental and social programmes can be made more affordable for consumers. The cost of these programmes, which are not paid in full by smaller suppliers, is currently expected to be £158 a year for a typical dual fuel customer in 2014.
The move means it will be more difficult for EDF Energy’s residential supply business to be profitable next year, but the company believes it is important to limit price increases for hard-pressed customers this winter. EDF Energy’s retail business has also ensured its own costs won’t add any extra burden to customers by seeking to reduce its operating expenditure.