Co-operative Energy beats rivals on ECO cuts

Co-operative Energy has been making headlines by reducing it's prices in anticipation of the government removing 'ECO' tax obligations from energy companies.

On November 13 it cut the average 4.5 per cent price increase it announced in October to 2.5 per cent. It was acting on the government's "clear indication" it would remove Energy Companies Obligation (ECO) taxes on gas and electricity bills.

Amid accusations that Co-operative Energy was forcing the government into a corner by announcing  the cut before the taxes had been officially revoked, General Manager Ramsay Dunning said: “We're not trying to bounce them into anything. We saw that the indicators were there. We are waiting for the announcement, but we want our customers to feel benefit through the winter.

"Given the expectation that an announcement is imminent that the burden of green and social taxes will be removed by the government, we've decided to take a leap of faith."

Launched in 2011, Co-operative Energy, which is part of Midcounties Co-operative, now has 150,000 customers. With over 250,000 meters, it is no longer classified by Ofgem as a small supplier and has the same obligations as the multinationals, which include ECO and Warm Home regulations.

Mr Dunning said: “Our position is that environmental and decarbonisation measures should remain the responsibility of the energy industry. Social measures should be the government’s responsiblity.

“There’s a part to play for energy companies, but sorry, it’s the government’s responsibility to keep the citizens of this country safe, dry and warm in their homes.

"We think we sense cross party support for that. ECO is a social measure, not a green tax. There’s also the fact that it’s a regressive tax. The better off pay no more than less well off."

He said there was no risk to the co-operative's members. “We run the business to be profitable and it is profitable," he said. "That profit goes mostly to either returns to our members through shares of profits or reinvestments in the business.

“If we’ve called it wrong we’ll review the costs next summer. We’ll have a different level of profitability and a revised business plan. There may be a bit less profit so we’ll develop a bit less.

“We’ve done a risk assessment. Whatever happens we’ll still make a profit. There’s no risk to Midcounties or its members. It’s a very considered plan.”

Co-operative Energy also announced a fixed tariff, which guarantees prices for customers until March 2017 to the first 10,000 customers, both existing and new.