EDF Energy Took 'Too Long' To Pass On Price Cut, Says Leading Financial Hardship Charity
The announcement that energy giant EDF is to cut gas bills by 5% from early February has been welcomed by consumer groups, with customers facing increasingly weighty tariffs in recent years.
The reduction, which EDF say has been made possible by a decrease in the wholesale price of gas following an unusually mild winter, is expected to be followed by the UK’s other major energy suppliers.
However, a leading charity that helps individuals in financial difficulty has criticised EDF for not doing more sooner.
"It has taken far too long for this reduction to be passed onto consumers," said Rob Tolan, Head of Policy and Research at Elizabeth Finn Care.
"When wholesale prices increase, energy companies are swift to pass on the cost, but the same speed isn’t seen when prices fall. It is time that more pressure was brought to bear on power giants in respect of the fairness of their pricing structures and the support they give to struggling households."
According to the charity the issue of high fuel costs has become "paramount", with two fifths of those who ask them for help struggling to heat their homes.
"On top of this, over half were regularly skipping meals, indicating that in Britain, at the start of 2012, there are still people being forced to choose between whether they 'heat or eat'."
"We urge other fuel companies to follow EDF Energy’s lead and ease the financial burden facing thousands of families across the UK, by lowering prices and increasing the support available to vulnerable households."
The price reduction comes on the same day as the consumer group Which? published a report that rated EDF as second from bottom out of the “big six” energy companies for customer satisfaction with a satisfaction rating of only 46%.
In response to the report, EDF put out a statement that said they "take complaints seriously" and are addressing the problems by "implementing new systems which, once fully in place, will deliver new and improved services for our customers."
According to Which?, more than four million complaints were lodged by customers of the "big six" last year.
Speaking to the BBC, Martin Lawrence, managing director of energy sourcing and customer supply at EDF, said it was a “coincidence” that the two announcements were made on the same day, while EDF Chief Executive Vincent de Rivaz said that all customers wanted was "fair, clear and transparent prices.”
“We know they want action rather than words," said de Rivaz. "That is why we are the first major supplier to announce a cut and were the last to increase prices."
In a highly competitive marketplace, reduction from the other companies are likely, with Energy Secretary Chris Huhne encouraging the other energy providers to follow suit.
“Households have faced real difficulties this winter after last year’s global gas prices pushed up bills,” said Huhne. “The situation is now changing, with the cost of gas imports falling, and I welcome that EDF have today responded, joining small suppliers Coop and Ovo, by cutting domestic gas bills.”
“It is only right that they should now pass on cost reductions to hard-pressed householders as quickly as possible. If suppliers do not reduce prices, consumers can send them a clear message by voting with their feet and taking their business elsewhere.”
However, Wednesday’s reduction from EDF follows a 15% hike in gas prices in November, plus the new price will only come into effect in February, towards the end of the winter.
The company also increased its electricity prices by 4.5% in November. No reduction in the price of electricity has been announced.
According to Adam Scorer, director of policy and external affairs at Consumer Focus, the cut “is not enormous”, but it could create “some important momentum in the market”.
“This is an overdue but nonetheless welcome move,” he said. “EDF Energy is the first of the major suppliers to reduce prices and the others will need to respond”
“It is now up to the rest of the ‘big six’ to compete and consumers will expect to see price come down across the board.”
According to an EDF spokesperson, the company has "not yet seen large call volume increases or many calls from customers" looking to switch to EDF following the announcement.