21 August 2008 10:06
E.ON announces price rise for residential customers

Over a quarter of customers unaffected

Spend to assist most vulnerable customers doubled

Prepayment meter customers to pay same price as E.ON standard prices

E.ON has today (THURSDAY) become the latest energy supplier to respond to rising wholesale energy costs by increasing electricity and gas prices for the majority of its residential customers, effective from 22 August 2008. 

Prices will rise by 16% for electricity and 26% for gas. The move comes as a direct result of rising wholesale costs which have increased by over 51% since February¹.  This will equate to 62p per day (22%) for the average dual fuel customer, who could still save £58 a year compared to being supplied by British Gas².

Graham Bartlett, Managing Director of E.ON's Retail business, said: "I'm very aware of the effect 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."

One in four customers unaffected

More than a quarter of E.ON's customers (1.4 million) are unaffected by today's announcement as they are already on price protection and fixed price products, including StayWarm.  E.ON has today launched a range of new protection products: 

• Price Protection v18 - a capped price product which protects customers from further price rises until 1 July 2010;
• Energy Saver v5 - as above, and also includes a free energy saving monitor to help people track their electricity consumption;
• Fixed Price v2 - a fixed price product 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.

Protecting vulnerable customers

E.ON's overall social investment doubled to £13.1 million in the last year, and the company has today announced it is to expand its existing social programme by launching ‘E.ON CaringEnergy' by the end of 2008³. 

The new scheme will offer older vulnerable customers with the greatest energy need a fixed price for 12 months which is guaranteed to be cheaper than E.ON's standard electricity and gas prices. E.ON CaringEnergy customers will also be offered a number of additional benefits, including free personalised energy efficiency advice and measures, and benefits entitlement checks to maximise household incomes.

Prepayment meter customers

Prices for E.ON‘s prepayment meter customers will now match those of E.ON standard customers for both electricity and gas⁴. E.ON is one of the first energy suppliers to do this.

Age Concern customers

Customers on the Age Concern Energy Services tariff will have their prices capped for the next 12 months, guaranteeing that they will see no further price rises until at least August next year⁵.

Investing in the UK energy infrastructure

E.ON is investing billions of pounds in schemes designed to keep the lights on, reduce carbon emissions and to keep bills as affordable as possible.

For example, E.ON is investing over £200 million in a gas storage scheme in Cheshire which will allow the company to store gas when prices are lower in the summer and to use it when wholesale prices increase. This will help E.ON smooth out some of the volatility in wholesale gas prices which has led to higher bills for consumers.  

Ends

Notes to editors:

1 Data based on one year ahead, forward wholesale costs taken between 8 February 2008 and 8 August 2008. Source: Heren Energy;

2 Inclusive of VAT and based on an average across paying promptly by quarterly cash or cheque and fixed monthly Direct Debit payment methods, nationally averaged, at an annual consumption of 20,500 kWh for gas and 3,300 kWh for electricity on an unrestricted meter;

3 Over the coming weeks, E.ON will be writing to customers on its existing social programme inviting them to join E.ON CaringEnergy ahead of its full launch later in the year. This will coincide with customers' next annual renewal date, and customers joining the scheme will be offered a fixed price for the next 12 months;

4 Before discounts are applied;

5 Prices will not rise above the new rates until 22 August 2009. If, during this period, E.ON's standard unit prices fall below these new rates, Age Concern customers' prices will go down too. The extent of the reduction will be determined by E.ON. Prices are protected subject to regulatory or VAT changes. Only available to existing residential Age Concern customers with Unrestricted, Economy 7 or Heatwise meters.

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 has around 5.5 million customers in the UK.

For further information please contact:

Joanne Smalley - 02476 180173

Cara Ponton - 02476 181303

Jag Kahlon - 02476 181308

Victoria Blake - 02476 181304