British Gas to launch $125 mln customer loyalty scheme

(Adds context, comment from analysts)

LONDON, Feb 22 (Reuters) - Centrica (Frankfurt: A0DK6K - news) owned British Gas, Britain's biggest energy supplier, said on Wednesday it would invest 100 million pounds ($125 million) in reduced bills and Sky (Frankfurt: 893517 - news) pay-TV packages as part of a customer reward programme.

The company said a range of new tariffs, to launch in April, would offer discounted energy and services, such as boiler servicing and insurance, as well as entertainment packages together with European pay-TV group Sky.

British energy firms are under pressure to improve customer service and keep retail energy bills down.

British Gas said this month it would freeze prices on its standard energy tariff until August but other firms have announced price rises from March and April, prompting renewed calls for more reform of the energy market.

Ofgem's chief executive said on Wednesday the energy market regulator has the power to cap energy price tariffs but the decision is a matter for the government.

Analysts at Barclays (LSE: BARC.L - news) said the loyalty programme could help retain customers which would lower Centrica's costs over time.

However, it was questionable whether it would help persuade regulators and the government that the firm and the industry as a whole is doing enough to protect loyal customers, they said.

"(We) doubt the government would distinguish between Big Six suppliers based on the introduction of a loyalty plan; especially when many materially cheaper fixed price tariffs remain available," they said in a note.

The so-called Big Six energy suppliers in Britain are Centrica, Scottish Power, E.ON, EDF Energy , Innogy-owned Npower and SSE (LSE: SSE.L - news) . (Reporting by Peter Hobson and Nina Chestney; editing by Louise Heavens and David Evans)