Ethical energy provider Co-operative Energy has today announced it is to increase its gas and electricity prices by an average of four-and-a-half per cent. The new price will not apply to existing customers until January 2014 but will apply to all new customers on sign up from 21st October.
The price increase represents half the actual cost increase facing Co-operative Energy as a business and in a move designed to protect both new and existing customers it has resisted passing on a full price rise, opting instead to both absorb half of the costs and hold current prices for customers for as long as possible.
Wholly owned by its customers with no shareholders demanding a slice of profits, Co-operative Energy believes the move to share the burden of spiralling energy industry costs will lessen the impact on customers. It is now calling for other suppliers to follow its lead and put customers before profits.
The price increase, which will take effect from 8th January 2014 for existing customers on Co-operative Energy’s Pioneer tariff, will equate to an extra £4.78 per month for an average dual fuel customer.
An average Co-operative Energy duel fuel customer will pay £1,315 per year.This is £73 per year less than a British Gas duel fuel customer, who is now looking at an average annual bill of £1,388.
Ramsay Dunning, general manager of Co-operative Energy, commented: “Due to increasing energy market costs beyond our control, namely the costs associated with buying energy and getting it into customers’ homes, we find ourselves in the position of having to now pass these costs on to our customers. As a customer-owned business we wanted to do everything within our power to make sure that the increase we are forced to pass on as a supplier is as low as possible. To demonstrate our commitment to our customers we have decided to effectively go halves and absorb the remaining cost.
“Last autumn, when the major suppliers increased their prices by, on average, 8.5% for gas and 8.3% for electricity, we were the only supplier to cut our electricity prices and the only supplier to promise to freeze all our prices throughout the cold winter months when consumers use most energy. Whilst we can’t promise a lengthy freeze as we have done previously, we do promise to hold our prices for existing customers for as long as we possibly can.
“As a customer owned business we have always looked after our customers at the expense of growing the business through better deals for new customers, and again we are looking after our customers and owners first and foremost."
Co-operative Energy, which is part of the Midcounties Co-operative, launched in 2011 and now has 150,000 customers. This pricing decision is consistent with Co-operative Energy’s pledge to provide its customers with fair prices and its promise to treat customers fairly.
Added Ramsay: “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. Any surplus profits we do make are shared amongst them and we do this twice a year every year without fail.
“Our customers’ interests always come first and we pledge to offer a fair and transparent price. Wholesale market prices have increased and unfortunately there’s nothing we can do about that but we are keen to ensure that the full increase we face is not reflected in customers’ bills and we will hold off from passing on this increase to try and ease the pressures over the winter months.
“Trust is at the heart of our business and at a time when the practices of the main industry players are being brought into further question, we need to show that we’re doing all we can to put customers first and build trust, which is why we’ve taken the steps we have. In addition we will be distributing £1.58 million to customer members of Midcounties Co-operative, the owner of Co-operative Energy, as a half yearly share of profit.”