© The Financial Times Ltd 2014 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
What’s the deal?
Scottish Power has launched a new energy plan that allows customers to fix their bills and avoid the impact of further price hikes in gas and electricity bills until late next year.
Households on the Online Fixed Saver plan will pay £1,129 a year on average, fixed until November 2012.
Is this good?
Fixing energy bills is a good idea right now.
It followed in the footsteps of British Gas and Scottish Power, which both increased the costs for domestic gas and electricity by similar amounts, blaming the increase in the price of the energy they buy on international markets, which has been pushed up by global events such as the Japanese earthquake and upheaval in the middle East.
Although the fixed rate the Scottish Power offers is slightly more expensive than the current standard tariff, £1,211, it is significantly cheaper than the standard tariff due to come into effect in August, which will see bills jump to £1,391.
What’s the catch?
This is just the average rate, which means some households will be paying more.
Bills are priced by region and can rise or fall depending on energy use, whether homes have a meter or not and whether billpayers pay with direct debit.
If you live in London and are a high user of energy you can expect to pay £1,563 on the Scottish Power fixed rate. But it works the other way too. Yorkshire dwellers who don’t use much energy will pay £785 on average.
What’s the alternative?
Although the Scottish Power fixed price plan is cheaper than the company’s standard tariff due in August, it’s still £120 more more expensive than the cheapest fixed price plan available from EDF Energy.
The EDF Fixed S@ver 2, which will keep prices static until September 2012, is on average £1,009.
First Utility also has a cheaper option in its iSave Dual Fuel V8, which will cost on average £1,032.
But it’s not clear how long these options will remain on the market now that half of the industry has hiked its prices. The new fixed tariff from Scottish Power seems to be a better indicator of the sorts of fixed rates that will be generally available from now on.
How do I find out more?
Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.