Challenger supplier Bulb Energy has confirmed its new average energy cost of £218 below Ofgem’s default price cap starting April.

Bulb customers on the electricity and gas, or dual-fuel, the tariff will see a cut on their bills by £56 per year. While gas bills are bound to drop by £78 on average, electricity customers will find an increase of £22 per year on average in their bills.

Bulb prepayment members can also enjoy a cut on their bills by £18 on average, or £1,026 per year.

Saving on Bills

About a million Bulb customers under the dual-fuel tariff will be seeing a drop on their bills from April, cutting an average of £56 a year in a statement made by the supplier.

Bulb stated the lowered gas prices in the market would offset high electricity prices, which makes dual-fuel customers see their bills decrease to £944 from £1000. The firm offers only one variable tariff to its 1.6 million customers.

Bulb stated the lowered gas prices in the market would offset high electricity prices, which makes dual-fuel customers see their bills decrease to £944 from £1000. The firm offers only one variable tariff to its 1.6 million customers.

For customers with electricity-only tariffs, the annual costs will increase by £22 on average, which is due to higher policy and network costs, according to Bulb.

Prepayment meter (PPM) customers will see a decrease in their bills as well, which amounts to £174 on average and still below the £1200 PPM p

Bulb also made another announcement regarding their energy charges. The firm stated that it’s changing from a single-standing fee to a variable one based on the transmission costs for different areas in the UK. It’s similar to how other energy suppliers deal with charges currently.

Fluctuating Costs

Expenses that suppliers handle to have access to the grid are network costs, while charges sanctioned by Ofgem and the Government are policy costs. These charges are allocated for public programmes that reduce carbon emissions and help consumers save energy.

The Warm Home Discount is one of the social programmes benefitting from the policy costs, which caters to pensioners finding it hard to pay fuel costs, especially during the winter season.

While gas delivery prices have fallen, the same cannot be said of costs for delivering electricity. Wholesale electricity prices might have lowered, but supplying it has racked up over the recent months. That is why additional charges have been passed on for electricity-only customers.

Bulb pays about an additional 3% for its distribution through local transporters and the National Grid in April, which is around the same time other policies and subsidy costs will be enforced.

Bulb CEO Comments

Bulb CEO and Co-Founder Hayden Wood expressed the firm’s mission to help more than a million members reduce their bills and decarbonise. He stated the single tariff they offer ensures customers that they get the best deal no matter how long they have been with Bulb.

Wood mentioned the wholesale charges for gas lowering, which is how the firm was able to pass on the savings to its members. He also pointed out the opposing increase in electricity costs due to higher policy and network charges.

However, the Bulb CEO highlighted that most of its customers would be enjoying a cut on their bills overall from April.

Bulb’s changes in pricing follow similar cuts as rival supplier Octopus last January, which presented a 2% reduction on bills. It promised an £80 reduction on the default tariff per year on average.

Bulb was established in 2013 and started trading two years after and currently holds a 5% share of the electricity and gas markets in the recent figures presented by Ofgem for the third quarter of 2019.

The firm offers 100% renewable fuel to its members but only purchases energy from the wholesale market and independent generators instead of producing it. In 2019, Bulb was listed in the top five brands people will recommend. This distinction was given by the YouGov Brand Index.

Bulb didn’t increase prices following the April 2019 energy price cap increase, which is one of the few suppliers to do so, even lowering its prices instead.