07 February 2008 13:35
E.ON becomes one of the last major energy suppliers to raise prices

Electricity prices to rise by 9.7%, gas prices by 15%

More than half a million customers unaffected

New Price Protection 2009 product launched

Price rise delayed until Spring for 670,000 vulnerable customers

Free package of measures available to all customers aged 70 or above

E.ON, the new name for Powergen, has today (THURSDAY) announced it is to become the fifth major energy supplier to raise prices for its residential customers. 

The increase of 9.7% on electricity and 15% on gas will come into effect for the majority of existing customers on 8 February (1) and is the direct result of rising wholesale costs which have increased by over 60% since February 2007, when E.ON announced the lowering of its prices (2).

A typical dual fuel customer will see their bill rise by 31p a day (1). Despite this, the average dual fuel customer could still save with E.ON compared to British Gas' post-increase prices (3).

More than half a million customers unaffected

More than 550,000 customers are unaffected by today's announcement as they are already on Price Protection or Fixed Price products, including more than 280,000 customers with StayWarm - E.ON's unique fixed price scheme for the over 60s. 

E.ON has today launched the only available capped product on the market. ‘Price Protection Until 2009' allows customers to cap prices until 1 October 2009 and has no tie-ins or cancellation fees. Customers on this product can save £56 compared to those already on British Gas' existing Price Protection 2009 product (4). Unlike this fixed price product from British Gas, customers who sign up to E.ON's Price Protection Until 2009 will see a reduction in the amount they pay if E.ON's standard prices decrease.

E.ON is also the only supplier to offer a Guarantee product which ensures that customers will pay less than with British Gas.

Graham Bartlett, Managing Director of E.ON Energy, said: "We realise the impact this price increase will have on our customers and we're doing everything we can to minimise this. Our announcement has been made in response to sustained pressures from the wholesale market.

"We are offering a new product to allow more customers to join the half a million already benefiting from protected prices, while also helping those customers who are most in need."

Protecting vulnerable customers

In order to shield 670,000 vulnerable customers from this increase until after the winter months, Age Concern and prepayment meter customers' prices will remain unchanged until 1 April 2008 (5).

To further help vulnerable customers offset the impact of this increase, E.ON is offering any customer aged 70 or above a range of free energy saving measures - including free cavity wall and loft insulation - which can save them over £400 a year on their energy bills (6).

As part of an overall spend of over £300m on providing energy saving measures over the next three years, E.ON's CaringEnergy scheme offers a range of support designed to help improve the energy efficiency and income of vulnerable households. This includes the £2m CaringEnergy Fund which can provide E.ON customers with financial support to cover the costs of insulation, heating measures, and essential household appliances.

Ends

Notes to editors:

(1) Increases shown are inclusive of VAT, and are based on an average across payment methods - ie paying promptly by quarterly cash or cheque and fixed monthly Direct Debit payment methods, nationally averaged, at an annual consumption of 3,300 kWh on an unrestricted meter for electricity and an annual gas consumption of 20,500 kWh;

(2) Wholesale costs have risen by 60% for gas and 88% for electricity since February 2007. Data based on one year ahead forward wholesale costs taken between 23 February 2007 and 24 January 2008 (Source: Heren Energy);

(3) Saving based on a customer taking both standard unrestricted electricity and gas from British Gas, paying by quarterly cash or cheque, changing to E.ON standard electricity and gas and paying promptly by quarterly cash or cheque. The saving is averaged nationally is based on consuming annually 3,300 kWh for electricity and 20,500 kWh for gas. Saving includes VAT and may vary according to payment method, region and consumption. Valid at 8 February 2008;

(4) Based on a customer paying quarterly by cash or cheque, paying promptly, taking both unrestricted electricity and gas at industry average consumptions of 3,300 kWh for electricity and 20,500 kWh for gas;

(5) In 2008, E.ON will also double the guaranteed Cold Weather Payment for Age Concern gas customers aged 80 or above. In addition, all Age Concern gas customers aged 60 or above can get additional payments beyond their guaranteed payment equivalent to three hours' use of a gas fire for every day the temperature drops below zero between December and the end of February. This is in addition to any support from the Government. In addition, prepayment meter customers will see a slightly lower increase in gas (13.7%) which follows a £20 reduction in their standing charge;

 (6) The following free measures are available to customers' households where at least one resident is aged 70 or over: cavity wall insulation, loft insulation for lofts with no insulation or insulation less than 60mm thick, a PowerDown energy saving plug for use with desktop computers, a low energy table lamp, two free low energy light bulbs, and two low voltage low energy halogen bulbs. E.ON customers aged 70 or above should call 0800 015 9854 to find out more. The £404 saving is made up of:

• - Cavity wall and loft insulation - £360 saving over a one year period, which is made up from increasing loft insulation from 25mm to 250mm and installing cavity wall insulation. The cost savings shown are approximate, are provided for illustrative purposes only and are based on a gas heated semi-detached house with three bedrooms. Saving assumes a gas price of 2.913p/kWh with a gas consumption of 31,700 units per annum (prior to installing the insulation measures). Individual savings may vary depending on type, age, main heating fuel type of your home or if you choose to take increased warmth following installation of the measures;
• - A PowerDown energy saving plug - £18 saving based on a range of computer peripherals including monitor, printer, scanner, broadband and speakers with the computer used for around three hours a day;
• - Low energy table lamp (£7 saving), two low energy light bulbs (£15 saving) and two low energy halogen bulbs (£4 saving). Savings based on replacing two standard light bulbs with low energy equivalents for an average four hours' use a day at an electricity unit rate of 10.52 p/kWh. Saving based on a low energy table lamp replacing a lamp with an equivalent wattage standard bulb, two x 11w low energy light bulbs, and replacing normal halogen bulbs with equivalent wattage low energy halogen bulbs.

E.ON is one of the UK's leading power and gas companies - generating and distributing electricity, and retailing power and gas - and is part of the E.ON group, the world's largest investor-owned power and gas company;

E.ON recently launched an online Energy Challenge - a one-stop-online-shop which can cut £160 a year off energy bills by offering a personalised energy efficiency report. E.ON also offers discounted energy saving appliances and measures at its online Energy Shop. Both are available at eonenergy.com. (£160 average annual saving achieved by implementing measures identified from 5,121 customers who completed energy efficiency surveys between 01/03/07-12/09/07. The survey has been accredited by BRE, a world leading certification organisation.)

For further information please contact:

Nick Sandham 02476 181 307

Jag Kahlon 02476 181 308

Cara Ponton 02476 181 303

Victoria Blake 02476 181 304