uSwitch: Powergen to be cheapest supplier... in 62 days time

Powergen's move today:

Powergen now the cheapest supplier for standard dual fuel - 4% or GBP39 cheaper than British Gas,1 but npower beats them by GBP1 for cheapest online plan2 Prices cut by 16% or GBP103 for gas and 5% or GBP20 for electricity making it the 2nd cheapest for gas and the 2nd cheapest for electricity3 New customers can apply for Powergen's cheap online prices immediately Price cuts to take effect from 30 April 2007andnbsp; - 49 days after British Gas' price cuts kick-in4 To pass on the full reduction in wholesale prices over the last 12 months, Powergen needed to cut its prices by 25.3% for gas and 15.3% for electricity.5 Instead it has settled for 16% and 5% respectively Powergen put its energy prices up by 40% or GBP288 last year1 - today's announcement sees its average fuel bill reduce from GBP1,005 to GBP9136 Since 1st January dual fuel energy bills have dropped from an average GBP1,013 to GBP9521 - 10 million people who have never switched could now save GBP2.09 billion7 Powergen today became the latest of the Big 6 power companies to unveil fully-blown price cuts.

It is reducing prices by 16% for gas and 5% for electricity from 30 April 2007,6 which means its 6 million customers6 will see gas bills decrease by GBP103 and electricity bills by GBP20.1 But, its move falls short of making it the cheapest online provider - losing out to npower by only GBP1.2 Powergen had hinted earlier this month that cuts were due 'shortly' after it briefly entered the fray by guaranteeing to undercut British Gas' standard prices for at least the next 18 months.

However, British Gas retaliated the following day with a further cut to its online tariff, highlighting the major flaw in Powergen's guarantee - it is only pegged against British Gas' standard prices - rendering the guarantee worthless.

With today's move, Powergen beats British Gas across the board, but British Gas has indicated that it may have some ammunition left and could cut prices further.

Tim Wolfenden, Senior Product Manager for Energy at uSwitch.com, says: "There are more tactics being played in this price war than in a game of poker - we have seen bluffing and double bluffing and now the stakes have been raised once again".

""Unfortunately, Powergen has not quite hit the mark as its customers will not be seeing the benefit of these cuts until 30th April - that is 62 whole days until it begins putting its money where its mouth is.

"Although there are still other suppliers yet to make their first move there are already some good offers on the table".

"This says to me that consumers should now be looking to make a move of their own - to the cheapest supplier." How the energy war has shaped up: Feb 8 - British Gas becomes cheapest provider as it announces price cuts effective 12th March - 17% for gas and 11% for electricity8 Feb 15 - Powergen sticks its toe in the water with 4 new products, but balks at full-blown price cuts for its 6 million customers Feb 16 - British Gas hits back a day later with second price cut, but only to its online tariff: it remains cheapest provider by GBP52 Feb 19 - npower wades in, lowering energy bills by 16% for gas and 3% for electricity for its 6.8 million customers, stealing British Gas' cheapest provider crown9 Feb 23 - ScottishPower edges towards the battlefield with a new capped product - but holds back from cutting prices.

Capped Price Online is the cheapest capped product currently available - GBP66 or 7% cheaper than ScottishPower's standard tariff2 Feb 27 - Powergen cuts bills by 16% for gas and 5% for electricity making them GBP39 cheaper annually than British Gas and GBP6 cheaper than npower for dual fuel.1 However, npower remains cheaper online by only GBP12.

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