First energy company cuts rates to below price cap levels

BudgetEnergie has become the first gas and electricity provider to cut its rates below the government’s price cap.

From March customers will pay €1.39 per cubic metre of gas and 39 cents per KwH of electricity, a fraction below the ceiling of €1.40 and 40 cents respectively.

The move will mainly benefit people who use more than 1,200 m3 of gas and 2,900 units of electricity in a year, as the price cap only covers usage up to these limits. Householders have to pay the full rate for any extra energy they use.

It also means the government will not have to compensate the company for the difference between the price cap and its domestic rates.

Budget Energie is the only company to set its rates every month rather than once every three months, which gives it an advantage over its competitors when wholesale prices are falling.

The month-ahead price for European gas, quoted on the Dutch TTF exchange, dropped below €60 per megawatt hour this week, having peaked at €350 at the end of August. Two years ago the market rate was less than €20 per megawatt hour.

Ben Woldring, of price comparison site Gasllicht.com, said he expected other companies to drop their rates in the coming months.

‘Other providers still have to pass on the high purchase prices from the expensive autumn months,’ he told nu.nl. ‘Budget Energie’s tariffs were the fastest risers in 2022, but now they’re the first to come down.

‘All energy providers will be busy doing their sums to see if they can get under the price cap.’