BRITISH GAS TO CUT GAS BILLS BY 5%

BRITISH GAS TO CUT GAS BILLS BY 5%

Centrica plc

19 January 2015

BRITISH GAS TO CUT GAS BILLS BY 5%

British Gas is to reduce household gas prices by 5%, cutting annual energy bills on average by £37*.

• The 5% reduction in standard tariffs will benefit 6.8 million customers, including all customers on British Gas Fix & Fall tariffs, from 27 February.
• The price cut reflects the recent fall in wholesale gas prices. Though most of the gas being used in customers’ homes today was bought at higher 2013/14 prices, our wholesale costs for 2015 are now reducing to a level where we can pass this reduction to our customers.
• Given the continuing volatility of wholesale prices, we will be keeping our prices under review for further movements up or down.

Commenting on the announcement, Iain Conn, Chief Executive of Centrica plc, said:

“We’ve been watching the significant moves in the international energy market extremely closely for some time, with the aim of helping customers with a price cut at the earliest possible opportunity. Operating in such a volatile market, no pricing decision is straightforward.

“We bear the responsibility of managing the risks of buying energy ahead on behalf of our customers, who value the predictability this brings. Taking this decision now, at a time of continuing uncertainty, shows our absolute commitment to pricing competitively, with customers at the forefront of our minds.”

Ian Peters, Interim Managing Director of British Gas, said:

“This price cut, worth £37 off the average annual bill, will help our customers keep their energy costs down at a time when many household budgets are still under pressure. We’re pleased that existing customers on our Fix & Fall tariffs will also see the benefit of this price reduction.

“We know customers expect competitive pricing and good value from British Gas and we continue to keep our prices under constant review. We have a range of competitively priced products, fixed and variable, to suit customers’ needs and preferences.

“We’ll also continue to lead in the development of innovative products and technologies to put customers in control of their energy usage and help them keep their energy bills as low as possible.”

British Gas leads the way in helping customers understand and manage their energy use:

• Tariff Checker: We tell customers, in every bill, if there could be a better British Gas tariff for them.
• Switching between tariffs: We charge no exit fees on our current available tariffs when customers are changing tariffs or switching.
• Reducing energy usage: We continue to lead on the nationwide roll-out of smart meters, with over 1.1 million installed, providing our customers with real-time information on their energy usage to help manage their bills. Over 150,000 people are also using our Hive Active Heating controls to manage their heating and hot water from a tablet or smart device.

Find out more at www.britishgas.co.uk or call us on 0800 048 0202.

In line with its usual practice, British Gas’ parent company, Centrica plc, will provide an update on the 2015 financial outlook in its Preliminary Results announcement on 19 February 2015, including the impact of the change to UK residential energy prices and of lower wholesale commodity prices across the Group.

ENDS

Notes to editors:

* Based on Ofgem average annual consumption of 13,500 kWh gas, across all payment methods and regions.

1. Breakdown of costs on the British Gas average dual fuel bill 2013:

Wholesale energy costs (47%), Transmission and Distribution (24%), Environmental and social policies (9%), corporation tax and VAT (6%), operating costs (9%) and profit (4%).

2. Regional variations

Region	Â	% Reduction	Â	£ Reduction
Eastern		(5.0%)		(£36.86)
East Midlands		(5.1%)		(£36.86)
London Electricity		(4.9%)		(£36.85)
ManWeb		(5.1%)		(£36.85)
Midlands		(5.0%)		(£36.86)
Northern		(5.2%)		(£36.85)
Norweb		(5.1%)		(£36.86)
Scottish Hydro Electric		(5.0%)		(£36.85)
ScottishPower		(5.0%)		(£36.85)
Seeboard		(4.9%)		(£36.85)
Southern Electric		(4.9%)		(£36.85)
SWALEC		(5.1%)		(£36.85)
SWEB		(5.2%)		(£36.85)
Yorkshire		(5.0%)		(£36.86)

Contacts:

British Gas Press Office 0800 107 7015
Centrica Media Relations 0800 107 7014
Centrica Investor Relations 01753 494 900