First Utility and Extra Energy have both launched new cheaper energy tariffs in what’s fast becoming a price war.

The small independent suppliers have lowered their prices within hours of each other in response to a drop in the cost of wholesale energy.

First Utility’s new deal

The new iSave Fixed v42 March 2016 will cost the average household using a typical amount of gas and electricity £935.49 a year. That’s over £15 cheaper than the previous version of the tariff.

It offers to fix energy bills for two winters and is available to new and existing customers on either a dual fuel or electricity-only basis.

However, a termination fee of £30 per fuel applies if the tariff is cancelled before the end of the term.

The biggest savings are offered to those that pay by Direct Debit and opt for paperless billing. Paying by cash or cheque attracts an extra charge of £2 per month or £24 a year.

Extra Energy’s new deals

Extra Energy was quick to respond to First Utility’s move by launching three new cheaper tariffs.

The Fresh Fixed Price January 2016 v6 is the supplier’s cheapest deal and will cost households with average consumption of gas and electricity £934 a year. Signing up to this tariff will fix energy prices until 31st January 2016.

For those that want to fix for longer there’s the Clear Fixed Price March 2016 v3. It will keep your bills the same until 31st March 2016. This tariff will cost a household with average usage £935 a year.

And the Bright Fixed Price January 2016 v7, which promises to keep energy bills fixed until 31st January 2016, will cost the average household £937 a year.  

All three tariffs must be managed online and set up on Direct Debit and come with a £25 termination fee per fuel if cancelled before the end of the term.  

How they compare

Here’s how the new tariffs from First Utility and Extra Energy stack up compared to other leading dual fuel tariffs on the market right now.

Source: lovemoney gas & electricity comparison centre. Prices based on average consumption as measured by Ofgem of 13,500kWh of gas and 3,200 kWh of electricity and a customer paying by monthly direct debit including VAT. NB Prices are the average for the whole of the UK. Actual costs vary by region.

Price war

Competition in the energy market has been heating up over the past few months.

Both ‘Big Six’ energy companies and smaller independent providers like First Utility, Co-operative Energy and Extra Energy have been jostling for the top positions.

And there has been pressure from commentators and experts for more companies to pass on the drop in wholesale prices.

For now it looks like Extra Energy is determined to keep the top spot.

However, that could all change very quickly based on recent behaviour.

Compare gas and electricity tariffs at lovemoney.com