For most of last year energy prices have headed in one direction - skywards. Our monthly bills have increased by an average of 40 per cent and have been at their peak all winter. This is, of course, when we use the most gas and electricity. But what about now that spring has sprung?
Well at last, it's the news we've all been waiting for. By the end of this month the big six energy companies will have cut their prices on either gas, electricity, or both. Good news - but why is it that the most we'll see them come down by is just ten per cent? How much money is that really going to put back in your pocket?
Costs began to plummet
When your bills were rocketing, the big six told us it was because of the rising cost of wholesale gas and electricity and that there was nothing that they could do about it. But last summer those prices began to fall and in October the price of wholesale energy costs began to plummet. In fact, since then it's pretty much halved.
We put the wholesale figures together and created two graphs. (You can see these graphs in the video at the top of this page.)
The first shows how much electricity actually costs the energy companies, and the second shows the same but for gas. They both clearly indicated that the costs to the companies have been coming right down. After working out what they pay, we decided to add what we pay to the graph with a red line so we could compare the two.
The results were clear. As the price of the wholesale gas and electricity went up, so did the cost to us - the consumers. But once the cost of wholesale was coming down we didn't exactly see the same trend. In fact, we took our graph out to the public and had them guess where they thought the line showing the cost to the consumer should go. As you would expect, most people guessed the cost to us would come down with the cost to the companies but, unfortunately, they were wrong.
Not what you'd expect
The red line showing the cost to consumers hadn't gone down at all, in fact the gap between what the companies pay and what we do, has got even bigger. This is certainly not what you'd expect, as even the spokesman for the big energy companies told us in October.
Dr Garry Felgate from the Energy Retail Association told us that when wholesale prices came down the competitive market would lower gas prices. Yet, so far, the price cuts that have been made are pretty small. Shouldn't they have been bigger? Watch Nicky Campbell talk to Dr Garry Felgate in a live interview at the top of this page.
Audrey Gallacher, head of company performance from Consumer Focus, told us that they felt the recent price reductions by the energy companies were a disappointment and that there was definitely more scope for prices to come down this year because of the drop in the wholesale price. She said that the consumers want reassurance that they're not being "ripped off".
Many of you agree and when you see what the companies pay, compared to what we pay, the energy companies price cuts seem pretty measly. We know they're making big savings, so why aren't they passing them on to you?
We invited Dr Garry Felgate from the Energy Retail Association back into the studio to discuss this.
The big six energy companies' price announcements:
Npower
Npower announced on 16 March that it is to reduce its electricity prices by eight per cent from 31 March. This means that customers' electricity bills will come down by £43 on average.
They say that as a result of these new prices Npower's monthly direct debit dual fuel tariff is more than £30 cheaper than that of British Gas.
Scottish Power
Scottish Power announced on 19 March reductions to its gas and electricity prices effective from 31 March 2009. Prices for gas customers dropped an average of 7.5 per cent and electricity bills by an average of three per cent. They say customers will see an annual average saving of £54.
EDF Energy
EDF Energy announced on 13 February 2009 a cut in its prices for its standard rate electricity customers of up to 12.5 per cent. The average change is a reduction of 8.8 per cent. The decrease will take effect from 31 March 2009. They told Watchdog: "2.3 million of EDF Energy's 5 million customers will experience price deductions [sic] as a result of this announcement. Unlike BG, our vulnerable customers on our social tariff, Energy Assist, will benefit from this price decrease."
E.ON
E.ON announced on 12 February it will cut its electricity price by nine per cent for the majority of its residential standard, online and pre-payment meter customers, effective from 31 March 2009. E.ON has not announced a gas price decrease, but they claim on their press release that, on average, gas prices remain cheaper than British Gas' post-decrease prices.
Scottish & Southern Energy
Scottish & Southern Energy will reduce its prices for domestic electricity and gas customers on 30 March 2009. Average prices for electricity customers will fall by nine per cent and for gas customers they will fall by four per cent for all standard customers.
British Gas
Its standard dual-fuel and pre-pay gas prices fell by 10 per cent on 19 February 2009. Its online tariffs Click Energy5 will fall by 6.6 per cent and Click Energy6 by 3.6 per cent. Those who pay by monthly direct debit had their monthly payment automatically reduced on 19 February.
Energy prices are still too high
Well at last, it's the news we've all been waiting for. By the end of this month the big six energy companies will have cut their prices on either gas, electricity, or both. Good news - but why is it that the most we'll see them come down by is just ten per cent? How much money is that really going to put back in your pocket?
Costs began to plummet
When your bills were rocketing, the big six told us it was because of the rising cost of wholesale gas and electricity and that there was nothing that they could do about it. But last summer those prices began to fall and in October the price of wholesale energy costs began to plummet. In fact, since then it's pretty much halved.
We put the wholesale figures together and created two graphs. (You can see these graphs in the video at the top of this page.)
The first shows how much electricity actually costs the energy companies, and the second shows the same but for gas. They both clearly indicated that the costs to the companies have been coming right down. After working out what they pay, we decided to add what we pay to the graph with a red line so we could compare the two.
The results were clear. As the price of the wholesale gas and electricity went up, so did the cost to us - the consumers. But once the cost of wholesale was coming down we didn't exactly see the same trend. In fact, we took our graph out to the public and had them guess where they thought the line showing the cost to the consumer should go. As you would expect, most people guessed the cost to us would come down with the cost to the companies but, unfortunately, they were wrong.
Not what you'd expect
The red line showing the cost to consumers hadn't gone down at all, in fact the gap between what the companies pay and what we do, has got even bigger. This is certainly not what you'd expect, as even the spokesman for the big energy companies told us in October.
Dr Garry Felgate from the Energy Retail Association told us that when wholesale prices came down the competitive market would lower gas prices. Yet, so far, the price cuts that have been made are pretty small. Shouldn't they have been bigger? Watch Nicky Campbell talk to Dr Garry Felgate in a live interview at the top of this page.
Audrey Gallacher, head of company performance from Consumer Focus, told us that they felt the recent price reductions by the energy companies were a disappointment and that there was definitely more scope for prices to come down this year because of the drop in the wholesale price. She said that the consumers want reassurance that they're not being "ripped off".
Many of you agree and when you see what the companies pay, compared to what we pay, the energy companies price cuts seem pretty measly. We know they're making big savings, so why aren't they passing them on to you?
We invited Dr Garry Felgate from the Energy Retail Association back into the studio to discuss this.
The big six energy companies' price announcements:
Npower
Npower announced on 16 March that it is to reduce its electricity prices by eight per cent from 31 March. This means that customers' electricity bills will come down by £43 on average.
They say that as a result of these new prices Npower's monthly direct debit dual fuel tariff is more than £30 cheaper than that of British Gas.
Scottish Power
Scottish Power announced on 19 March reductions to its gas and electricity prices effective from 31 March 2009. Prices for gas customers dropped an average of 7.5 per cent and electricity bills by an average of three per cent. They say customers will see an annual average saving of £54.
EDF Energy
EDF Energy announced on 13 February 2009 a cut in its prices for its standard rate electricity customers of up to 12.5 per cent. The average change is a reduction of 8.8 per cent. The decrease will take effect from 31 March 2009. They told Watchdog: "2.3 million of EDF Energy's 5 million customers will experience price deductions [sic] as a result of this announcement. Unlike BG, our vulnerable customers on our social tariff, Energy Assist, will benefit from this price decrease."
E.ON
E.ON announced on 12 February it will cut its electricity price by nine per cent for the majority of its residential standard, online and pre-payment meter customers, effective from 31 March 2009. E.ON has not announced a gas price decrease, but they claim on their press release that, on average, gas prices remain cheaper than British Gas' post-decrease prices.
Scottish & Southern Energy
Scottish & Southern Energy will reduce its prices for domestic electricity and gas customers on 30 March 2009. Average prices for electricity customers will fall by nine per cent and for gas customers they will fall by four per cent for all standard customers.
British Gas
Its standard dual-fuel and pre-pay gas prices fell by 10 per cent on 19 February 2009. Its online tariffs Click Energy5 will fall by 6.6 per cent and Click Energy6 by 3.6 per cent. Those who pay by monthly direct debit had their monthly payment automatically reduced on 19 February.
Energy prices are still too high