This new deal undercuts the tariff launched last week by Ovo Energy by £4 per year.
First Utility’s iSave Fixed July 2015 (v20) tariff, alongside Ovo’s offering, undercut the average annual dual fuel bill of £1,264 per household.
Ed Kamm, chief customer officer of First Utility, said: “The activity at the top of the price comparison table shows that there is active competition within the market – something we have been actively encouraging – and it will be interesting to see if the larger suppliers choose to get involved.”
Tom Lyon, energy expert at comparison site Uswitch.com, added: “The dominance of the big six has been well and truly challenged by First Utility, as it becomes the second small supplier in a week to offer consumers a better deal.
“This can only be welcome news; as competition heats up in the battle for hearts and minds suppliers will have no choice but to offer superior service, lower prices and better value for customers.
“The latest plans from both First Utility and Ovo will offer households welcome relief, with the high cost of energy threatening to push many of them to their financial tipping point over recent years.
“This could well be the start of a price war amongst suppliers, and it is excellent to see some of the smallest leading the charge.”