Energy Bills: Small Firms Challenge 'Big Six'
Smaller gas and electricity suppliers are throwing down a challenge to the so-called 'big six' firms amid the row over huge rises to household bills.
The Co-Operative, which has a customer base of 150,000, called on its larger rivals to put customers before profits as it announced a hike to its tariffs that is about half the rates announced by British Gas and SSE.
And First Utility, which supplies 190,000 homes, has said it will freeze its prices until after winter.
The Co-op said it was absorbing some of the spiralling costs of buying wholesale energy as it increased prices by an average 4.5%.
It said the rise would not apply to existing energy users until January but would hit all new consumers from October 21.
Co-Operative Energy said the increase equated to an extra £4.78 a month for an average dual fuel customer, who it said would now pay £1,315 a year - but this was still £87 a year less than a British Gas bill, according to figures from the owner of the latter, Centrica.
Ian McCaig, chief executive of First Utility, said the company will assess their prices again in the spring but that the "most important thing to do is not increase prices when bills are at their highest".
While Scottish Power, E.ON, EDF and npower are yet to announce any rises ahead of the coming winter, British Gas confirmed on Thursday it was hiking electricity bills by 10.4% and gas tariffs by 8.4%, affecting 7.8 million households.
The previous week, SSE announced it was hitting seven million customers with an 8.2% rise on average.
Both blamed a combination of Government green levies and rising energy costs for the increases.
British Gas said the profits it made were crucial in funding investments but Centrica also paid £816m shareholder dividends last year, a rise of 7%.
Co-operative Energy is wholly-owned by customers and shares out surplus profits among members.
It says it is shouldering part of the burden of spiralling costs to lessen the impact on customers.
The company said it is now calling for other suppliers to follow its lead and put customers before profits.
General manager Ramsay Dunning said: "We pledged to offer fair pricing and even after this increase we will still be competitively priced against the big suppliers' standard tariffs.
"We are not increasing prices to reward financial investors, but to ensure we continue to run a sustainable business for our members."
In the wake of the recent hikes in bills, the Prime Minister has spoken of the need for consumers to shop around for the best deal.
He has described as a "con" Ed Miliband's pledge to freeze bills for 20 months should his party win the next election.
The Labour leader has accused ministers of doing nothing to help consumers with rising bills, insisting the market needs to be reset.