Mar 25, 2023
Ovo Offers Its First Competitive Power Prices Since Crisis
(Bloomberg) -- Ovo Energy Ltd. is offering to sell electricity to consumers below the UK government’s guaranteed level for this first time since the energy crisis began in 2021.
Ovo’s fixed tariff priced at an average annual cost of £2,275 ($2,780) is only available to existing customers, but it marks a de-escalation in the risk for suppliers buying power and gas in advance.
Wholesale gas prices have dropped about 84% from their highs in August but are still about three times their level before the energy crisis. Government support for domestic energy currently caps the typical annual bill for households at £2,500 with the government covering costs above the cap. For months, suppliers haven’t offered any deals to customers because of volatile prices and tariff limits.
Ovo said it’s responding to customers wanting the security of a long term fix to protect them against the continuing energy price uncertainty.
Despite the government support, Britons will continue to pay more for energy. The average annual household bill in April will be £285 more than a year earlier, according to the Energy and Climate Intelligence Unit, an independent nonprofit. Charities including Citizens Advice and National Energy Action have repeatedly called for long-term support for households. NEA expects an estimated 7.5 million people to be in fuel poverty.
“People need to be very careful not to just jump on a fix because it costs less than they’re paying right now,” Martin Lewis, a consumer rights activist, said in a tweet. “The cap is currently set by the Energy Price Guarantee and will stay roughly stable until the end of June.”
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