Energy regulator Ofgem has urged customers of EDF Energy and Scottish Power to switch to new suppliers for cheaper power.

Ofgem says that customers can save up to £140 a year if they make the switch because these companies have failed to pass on wholesale cuts in the cost of energy to their customers, whereas some of their rivals have done this.

The number of people switching energy suppliers has risen steeply this year, with more than 600,000 households doing so in January and February of this year alone.

“Our research shows that a big price gap has opened up leaving EDF Energy and Scottish Power customers paying over £100 a year more for their energy for remaining loyal,” said Ofgem chief executive Alistair Buchanan.

“Competition is all about customer power – any supplier that tries to buck the market by not lowering their prices or failing on service risks an exodus of customers.”

Last year Ofgem warned that if suppliers did not cut their prices in the light of the wholesale price reductions, it might fine them up to 10% of their annual turnover.

Scottish Power said it was “monitoring prices”, while an EDF Energy spokesperson said: “We are continuing to provide competitive prices and deliver excellent service.”