British Gas energy bills to fall by £100 due to warm weather, say Centrica ñ wholesale prices down by 25% over first 6 months of 2014
Households will see £100 shaved off their gas & electricity bills this year primarily as a result of the warmer weather the UK has enjoyed in 2014, according to a statement made by British Gasí parent company.
Centrica noted that whilst colder than anticipated temperatures for 2013 led to households using greater amounts of gas to meet their desired levels of comfort over the first 10 months of the year, this figure fell by 21% over the corresponding period of time this year whilst electricity usage also decreased by 7%.
This fall in gas & electricity usage has contributed to British Gasí waning customer base over the course of this year, and Centrica disclosed that it has just begun seeing an influx of new clients following its hotly-debated ìwhite labelî agreement with associate Sainsburys Energy through which it purports to offer families great value deals for this coming winter.
At present, British Gasí customers are kept in the dark by their supplier over the greater value the ìwhite labelî deal offers, instead only notifying them of the best deal exclusively offered from British Gas. In actuality, through the ìwhite labelî agreement, British Gas provide better value for customers under the Sainsburys brand ñ a reality which has caused consternation in certain circles and has led to Ofgem spearheading a proposal to force British Gas to instruct their clients that they would be in line for better value if they switch.
This aside, many more clients must be enlisted to compensate for the 50,000 formerly British Gas-fuelled households that have parted company with the energy supplier since June alone, let alone the 250,000 which official figures show have switched supplier since the start of 2014.
In October alone, 138,000 switches to smaller suppliers took place effectively, symbolising the greater flexibility customers are enjoying.
Official industry figures revealed wholesale prices have plummeted by 25% over the first half of this year, and this combined with the lower usage of fuel across the UK has piled pressure on the largest energy suppliers to reduce their billings.
SSE have already made their intent to be the first to reduce the amount they charge, following on from their enactment of a price freeze from March earlier this year to 2016, amid tetchy times for the energy industry with the investigation from the Competition & Markets Authority underway and a potential change in government in the offing next year.
Yet, other members of the ëBig Sixí energy suppliers have argued that the amount they charge is an accurate reflection of the amount paid 3 years in advance, despite the price of wholesale energy at present. If this line of argument is to be accepted, than customers can hope for probable price cuts in years to come, given the cheaper cost of bulk for
suppliers at present.
Centrica also reported its earnings per share for the year will be roughly 20%, sending its share value down by just under 2%, mainly due to safety concerns which resulted in the closures of nuclear plants in Heysham and Hartlepool.
The two plants, co-owned with other energy giant EDF Energy, closed due to an unforeseen crack in a boiler, are expected to be up and running in the near future albeit at 75% capacity until suitable repairs can be applied at some time in 2015.
Centricaís profit warnings for July showed a £265m yield for British Gas ñ a 26% decrease in the 12 months to that point, with the CMA investigationís influence a potential reason for the reduced amount of business the energy giant has enjoyed.
Despite this, Centrica are anticipating growth next year as its businesses continue to manifest across the country and its efficiency of service grows in line with its business model.
This is a viewpoint shared by certain critics, with Angelos Anastasiou, analyst at Whitman Howard, stating: 'We still think Centrica remains well placed, being financially sound, with strong cash generation, and with the negatives already reflected in the current low rating,'
New Leadership in the form of Ian Conn, current BP chief executive, will take up commanding duties of Centrica from 1st January next year no doubt steeled to cope with all the pressures congenitally attached to an election year ñ especially for the finely balanced energy sector.
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