Challenger energy supplier Bulb is cutting gas prices, but its 1.6 million customers will see some of those savings eroded by rising electricity costs.
Bulb said it is passing onto households savings from a falling wholesale gas market, reducing the typical gas bill by £78 a year. However, higher electricity network and policy costs will nudge up the cost of Bulb’s renewable electricity by £22 a year.
Dual-fuel Bulb customers will see their annual bills fall from £1,000 to £944, savings of £56. Bulb said more than one million customers will see savings over the coming year. However, households which only use electricity will see their bills increase.
Pre-payment dual-fuel customers will also see their bills fall, but only by an average of £18.
Because Bulb only offers a single tariff, all customers will see the price changes.
Hayden Wood, co-founder and chief executive of Bulb said: “Our mission is to reduce our members’ bills and cut their carbon emissions, so it’s great we’re able to cut bills for over one million homes. By having a single tariff, our members know they’re always on our best deal, whether they joined us four years ago or just signed up this week.
“The wholesale cost of gas has come down, so we’re passing those savings on to our members. Higher network and policy costs have meant we’ve had to put up our electricity prices but most members will see their bills go down overall.”
Renewable supplier Bulb has grown rapidly since its launch in 2015 and now supplies more than 1.6 million customers, up from just 870,000 a year ago and 326,000 in 2018. However, the rapid growth has come at the expense of the company’s finances: Bulb recorded net losses of £129 million between April 2018 and March 2019, up from £28 million the previous financial year. Wood said that the rising losses are in proportion to rising revenue and are “part of the plan.”
That plan is an ambitious scheme to not only become one of the UK's largest energy suppliers within five years but also to supply more than 100 million customers around the world with renewable power. Bulb will launch in three international markets— France, Spain and Texas—this year.
As it’s expanded, Bulb has retained a reputation for customer service. The supplier ranked third in Which?’s annual customer service rankings for energy companies.
Rival Octopus announced a similar price cut in January, trimming the price of its standard variable tariff by 2%, saving customers an average of £80 a year.
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