British Gas Announces Second Price Cut of £40 - Tota

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News

26 April 2007

British Gas announces second price cut of £40 - total reduction of £207 this year

British Gas today announced a further cut to its standard electricity and gas rates for domestic customers with immediate effect. Its electricity rates fall by a further 6 per cent and gas rates fall by 3 per cent.(1)

Together with the decrease announced earlier in the year this second round of price cuts for British Gas customers reduces the average annual dual fuel bill by £207. This takes average prices down to £913 from £1,120(2) in just over six weeks. British Gas’ standard dual fuel tariff is now cheaper than the local supplier in every area of the country(3) and Click Energy remains the cheapest energy tariff on the market.(4)

This move follows the 12 March price cut which saw the company reduce standard gas prices by 17 per cent and electricity by 11 per cent.(5)

Since British Gas announced the March price cut in February, over 678,000 new customers have signed up, and it has seen overall net growth of its customer base since the start of April 2007.

British Gas' new Managing Director Phil Bentley said: "We want British Gas to offer the best value around. We’ve taken the lead on lower prices and we are committed to restoring our customer service to an industry-leading level. That’s why we’ve added an extra 800 people to our call centres, scrapped plans for the £5 late payment charge, and why we are reducing our prices again – and doing it immediately. Our two price cuts within the space of seven weeks will mean annual savings of £207 for our customers - while some of our competitors have failed to cut prices even once. Since we announced our first price cut more than 678,000 customers have signed up to British Gas and we’re now growing our customer base.

"As well as being cheaper than our competitors, we are also greener: British Gas is the biggest supplier of green power to UK homes and our electricity has the lowest CO2 emissions of any major UK energy supplier."

Last month, British Gas also launched the UK’s largest social tariff, the Essentials Tariff, at a cost of up to £40 million per year. Essentials will lower gas and electricity bills for up to 750,000 vulnerable customers – equivalent to the cheapest British Gas standard tariff. Following today’s announcement prepayment meter customers who qualify for Essentials will have seen their energy bills drop by 28 per cent since 11 March which will mean an annual saving of £322(6).

As a further measure for customers seeking reassurance over volatile energy prices in the future, British Gas has updated its Price Guarantee 2008 product. At no extra premium and with no early exit penalty, customers who take this product are guaranteed British Gas’ new cheaper prices until 31 May 2008. The company is writing to all its existing Price Guarantee 2008 customers to confirm that today’s electricity and gas price cut will automatically apply WorldReginfo - 828ea0ad-863c-4d60-8a36-443e5038f57e http://www.centrica.com/index.asp?pageid=29&newsid=1048 17/07/2008 Centrica plc - Investors - News - British Gas announces second price cut of £40 - tota... Page 2 sur 4

to them.(7)

After this price cut British Gas will still deliver a sustainable margin in 2007 which enables it to make necessary future investments.

Dual Fuel prices at 26.04.07

Local Local Supplier Region Supplier’s British Gas bill British Gas Saving (£) bill Scottish Power Scottish Power £943 £847 £96 Manweb £934 £839 £95 EDF Energy London £943 £816 £127 Seeboard £934 £809 £125 SWEB £969 £840 £129 npower(8) Midlands £981 £845 £136 Northern £994 £857 £137 Yorkshire £984 £850 £134 Powergen(9) East Midlands £941 £832 £109 Eastern £941 £831 £110 Norweb £951 £846 £105 Scottish and Southern Scottish Hydro £829 £827 £2 Southern £840 £824 £16 Swalec £859 £853 £6

Bills are based on industry average annual consumption of 20,500 kWh for gas and 3,300 kWh for single-rate metered electricity paying by monthly direct debit

Online Dual Fuel prices at 26.04.07 British Gas Click Energy 2 £755 Powergen £779 Scottish Power £773 npower £785 Scottish and Southern £787 EDF £857

Ends

Centrica Investor Relations: 01753 494900

Media Relations Contacts: Alan McLaughlin: 01753 494105 / 07789 570598 Mish Tullar: 01753 494104 / 07789 570808 Anne Morton: 01753 494106 / 07979 566274 WorldReginfo - 828ea0ad-863c-4d60-8a36-443e5038f57e http://www.centrica.com/index.asp?pageid=29&newsid=1048 17/07/2008 Centrica plc - Investors - News - British Gas announces second price cut of £40 - tota... Page 3 sur 4

Notes to Editors

All price comparisons are based on industry standard average annual gas consumption of 20,500 kWh and electricity consumption of 3,300 kWh on a single rate meter, are rounded and include VAT at 5%. Excludes any prompt payment discount that may be available from other suppliers. Electricity price reductions averaged across all electricity regions - actual decrease will vary by region and meter type.

£ saving quoted in the headline is based on payment quarterly by cash or cheque.

1. For ALL standard tariffs – monthly direct debit, quarterly by cash/cheque or prepayment giving a further reduction of £40 for the average dual fuel customer paying by quarterly cash/cheque 2. Based on payment quarterly by cash or cheque. 3. Compares our standard Monthly Direct Debit prices to those of Powergen, Scottish Power, npower, Scottish & Southern and EDF, in their former host supply regions as at 26 April. 4. Based on a dual fuel comparison of major suppliers on UK Power as at 25 April in each region. 5. Based on quarterly cash/cheque and monthly direct debit prices 6. Compares prepayment tariffs as at 11th March 2007 to monthly direct debit tariff as of 26th April 2007. 7. Due to the close proximity of the April 26th price reduction announcement to when Price Guarantee 2008 was launched, customers who have already signed up to it will also see the reduction in their energy rates. They are also guaranteed their credit payment as a result of this latest price reduction announcement, after 31st May 08, provided they are still on this product at that time. With the exception of Price Protection 2010, customers on our other price protected deals will not be subject to cancellation fees should they decide to move off their price protective tariff. Price Protection 2010 prices are lower than our 26th April 2007 standard rates. 8. Reflects npower's current prices. Even after npower’s price reduction on 30th April British Gas will remain cheaper than npower for dual fuel in their home areas on average by £17 (dual fuel monthly direct debit). 9. Reflects Powergen’s current prices. Even after Powergen’s price reduction on 30th April British Gas will remain cheaper than Powergen for dual fuel across their home area on average by £23 (dual fuel monthly direct debit).

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