App-only green energy provider Pure Planet has announced it is reducing its membership fees to £151 lower than the default tariff cap introduced by Ofgem.

The Bath-based supplier claims if the price cap rises by £100 in April, as many industry insiders have predicted, its customers will pay £200 below the standard variable tariff cap, currently set at £1,137.

Pure Planet says its annual membership fee will be £986 a year for customers with a typical bill.

Steven Day, co-founder of Pure Planet, said: “We are now £151 lower than the current cap – proving consumers can still save substantially by shopping around.

“If, as expected, Ofgem announces a significant increase of around £100 to the limit in the next few days Pure Planet will offer even better value.

“And as our market share grows, we’ll become even more efficient, enabling us to keep prices low.”

Last month Pure Planet was granted temporary directions for “alternative compliance assessment for the default tariff price cap”.

This is on the basis that the company’s non-standard charging structure means that applying the price cap would “not have been in the best interest of most of its consumers,” according to Ofgem.

This will remain in effect until 31 December this year, unless otherwise revoked or amended by Ofgem.

The price cap came into force on 1 January this year and will be updated in April to a level announced this coming Thursday (7 February).

According to Ofgem 11 million households on poor value default tariffs are set to save around £76 on average under the current cap, while a typical consumer on the most expensive tariffs would save more than £120.

Speaking at a recent conference Ofgem’s chief executive, Dermot Nolan, said the likely increase to be announced this week will be “potentially significant”.

He said: “While I cannot say today exactly what it will be, wholesale costs have risen significantly over the last year.

“As a result, it is likely that we will announce an increase – and potentially a significant one – in the level of the cap.

“Even if this is the case – and obviously I hope that any increase can be ameliorated and as minor as possible, but ultimately I can’t guarantee that as we are committed to passing through efficient costs – customers can still be confident that any increase in the cap only reflects changes in the actual costs of providing the gas and electricity they use – and that they will always pay, as a result, a fair price for their energy.

“At the same time, we will be vigilant in terms of supplier performance, and ensure that the introduction of price protection does not lead to a reduction in supplier standards of conduct or indeed customer service.”