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First Utility partners with Shell to bring down its energy costs

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by Suzie Neuwirth: December 10, 2013

IN A bid to break the stranglehold of the big six, independent energy supplier First Utility yesterday said it has secured a partnership with Shell Energy to get better deals from the wholesale market.

Under the new five to 10 year deal, energy giant Shell will act as an intermediary for First Utility, using its scale and expertise to competitively source wholesale electricity and gas.

First Utility has previously spoken about the difficulties competing with vertically integrated energy suppliers such as SSE and Centrica, who have both retail and generation businesses. While their retail divisions buy energy in the wholesale market, much of it has been produced by their own generating arms, which make much larger profit margins.

“Our agreement with Shell provides us with the ideal strategic partner to support our growth and underpin our proposition to offer customers competitive rates in the market,” said Ian McCaig, chief executive of First Utility.

Competitive energy prices have been a hot topic since Labour leader Ed Miliband said in September that he would freeze bills if elected. Since then, all of the big six firms have announced inflation-busting price hikes. Most have now said they will approximately halve the increases after the government vowed to shift some green levies away from bills and into general taxation in last week’s Autumn Statement.

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