Energy News

Energy giant E.ON are next to raise prices

Thursday 21 August, 2008

By becca.talbot@consumerchoices.co.uk

Energy supplier E.ON (www.eonenergy.com) announced earlier today that they will be raising electricity costs by 16% and gas costs by 26%, in response to increased wholesale prices.

Dual fuel customers, who take both gas and electricity from E.ON, will see their annual household energy bills rise by 22%, leaving the average standing at £1,226.

Graham Bartlett, Managing Director of E.ON, said: “I’m very aware of the affect that today’s announcement will have on our customers and I recognise that this is a very tough time for everyone. This was not an easy decision to make and we’ve tried to keep these increases as low as possible while protecting as many of our customers as we can.

“We’re launching a range of products to protect prices and offer our customers peace of mind in an uncertain market, and are also announcing that we will more than double the number of vulnerable customers we help.”

Following British Gas’ (www.britishgas.co.uk) lead, E.ON have launched a new Fixed Price 2 tariff, which allows customers to set their prices at the new rates until 1 November 2009 at no additional cost and with no tie-ins or cancellations fees. However, fixed rates will remain the same, even if E.ON reduces their standard gas and electricity prices.

The energy supplier has also launched Energy Saver 5, giving customers the choice to cap prices until July 2010. With this tariff, rates won’t go beyond a certain capped rate, and if E.ON reduces their standard prices, customers will see their prices drop too. Customers will also benefit from a free energy saving monitor, to help track their electricity consumption.

E.ON has also amended their Price Protection tariff, and now offers v18, with capped prices until July 2010.

The move to raise their prices, which will come into effect as of tomorrow (22/08/08), comes after news that wholesale gas prices increased by 14% in a day, because of a leak on a North Sea Norwegian pipeline prompting fears about gas shortages this winter.

E.ON said that more than a quarter of its British customers on price protection and fixed tariff products won’t be affected by the price hikes, including households on the StayWarm tariff.

Energy customers in the UK have already seen bills soar this year due to the rising cost of wholesale gas and electricity, and an estimated 4.5million people are already living in fuel poverty. This figure is expected to rise by at least a million over the winter months.

Age Concern director general Gordon Lishman said in The Independent today: “These enormous price hikes will be a huge blow to millions of people already wondering just how they’re going to pay their bills this winter.

“We are extremely concerned that the one in three pensioner households likely to be living in fuel poverty by the end of the year will feel forced to cut back on essential food or fuel.”

Chris Eagle, Financial Director of EnergyChoices.co.uk said of the price rise: “These price rises were inevitable. Now though, the Government and energy suppliers should be working together to offer fuel vouchers to those suffering in fuel poverty.”

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