Household Gas Price Changes

March 2010

SWALEC will introduce a package of changes in prices for household gas supply from 29 March 2010 under which it will cut unit prices, adjust the ‘fixed’ charge element in bills¹ and remove the extra charges levied on its ‘single fuel’ and pre-payment tariffs compared with standard credit tariffs.

The effect of these changes on a typical customer using the industry standard amount of gas (20,500kWh per annum) will be to reduce SWALEC's gas bills by: 4% or £30 (standard credit/direct debit); 7% or £56 (single fuel); and 9% or £70 (pre-payment). As a result, these SWALEC customers will pay around 5% less for their gas than customers of British Gas.

In addition, SWALEC's gas pre-payment tariff will be the lowest in Great Britain. The removal of the extra charges levied on SWALEC's gas pre-payment tariff follows the earlier removal of the extra charges levied on its electricity pre-payment tariff.

Alistair Phillips-Davies, Energy Supply Director of SWALEC, said:

"Energy supply is still a challenging business, with significant upward price pressures which run counter to reductions in wholesale costs, but we believe this is a responsible package of measures which confirms that we are one of the country’s most competitive energy suppliers. We will do everything we can to make sure customers get value for money from energy supply, with energy efficiency and customer service continuing to be top priorities."

^{1. There are a number of 'fixed' costs in supplying gas to customers which do not vary with consumption, such as the cost of distributing gas to people's homes, metering, energy efficiency measures (such as CERT), billing, and customer service costs. SWALEC recovers these costs in its gas tariffs through both 'fixed' and 'unit' charges.  The 'fixed' charges are either in the form of a ‘standing’ charge or a higher unit rate for the first 1,143kWh of gas consumed in each quarter of the year.  To align them more closely to the unit charge structures adopted by other suppliers, and therefore make price comparisons easier, the level of SWALEC’s ‘fixed’ charges will increase to £98, including VAT.  Within Great Britain’s gas supply market, the average ‘fixed’ charge levied by the other five major suppliers is £120, including VAT. 
2. Under SWALEC’s package of changes, unit prices for gas not forming part of the initial 1,143kWh per quarter unit rate will be cut by at least 11%.
3. The savings quoted are for customers in England and Wales.  In Scotland the equivalent savings are: 4% or £28 (standard credit/direct debit); 7% or £52 (single fuel); and 11% or £90 (pre-payment).
4. Following these changes, SWALEC’s average ‘dual fuel’ standard credit bill will be £1162 averaged across Great Britain and based on average domestic consumptions (3,300 kWh electricity per annum and 20,500 kWh gas per annum). Excludes ‘prompt pay’ discount of 2.5%. Includes VAT at 5%.}