By Richard Cranidge
A small energy firm is bidding to win more customers from the so-called Big Six after unveiling a 2.5% cut in prices.
Stephen Fitzpatrick, chief executive of Ovo Energy, said the reduction is possible because the relatively mild winter had led to a fall in wholesale prices of between 6% and 7%.
Mr Fitzpatrick claimed that Ovo's customers now pay about £180 less annually on average compared to householders who use the Big Six firms.
These are British Gas, EDF Energy, npower, E.ON, Scottish Power and SSE.
He said that as a small company Ovo is able to operate in a smarter way than the bigger firms.
Energy giants accused of making excuses
He also denied that it could undercut its rivals because it does not have to pay the green levies which fund work, such as insulation, to reduce fuel poverty.
Instead, he accused the energy giants of using the environmental levies as an excuse to keep bills high, knowing that many customers are reluctant to switch from long-standing energy suppliers.
"We are about 18% cheaper than the average Big Six standard tariffs and green levies comprise about 3%," Mr Fitzpatrick said.
"And actually this year we are going to have to pay them anyway.
"We do a lot of small things better and it all adds up. We are smarter about the way we buy energy.
"For example, we've been buying a lot of energy in the last couple of weeks as prices have fallen.
"We didn't lock in at very high prices and our customers are benefiting from that."
Fourth price cut in six months
He told BBC Radio 4's Today programme that the latest 2.5% price cut is actually the fourth that the company has introduced in the last six months.
"What we've seen is the weather over this winter has been quite mild and it's led to gas and electricity prices falling by about 6% or 7%.
"And on top of that we are starting to see some impact from the government policy where they have asked distributors and network companies to try to reduce their cost.
"The rates that we are charged for accessing the pipes and the wires has fallen for next year following some government intervention, so that's feeding through as well.
"I think today we are going to be £180 cheaper than the average Big Six standard tariff that most people pay."