07 March 2017 10:34
E.ON announces 8.8% dual-fuel price increase from 26th April 2017
E.ON has today announced that, due in large part to increasing policy costs and other costs it doesn’t control, it will increase its standard variable dual fuel prices from Wednesday 26th April 2017. This is the first rise in E.ON’s standard variable prices in more than three years, during which time it lowered its standard variable gas prices on two occasions(1).
The dual fuel price change stems largely from an increase in costs, due mainly to the rise in non-energy parts of the bill such as social and environmental schemes, which support renewable energy and help customers use less energy. E.ON has been able to partially offset some of these increases through a reduction in the cost of energy purchased on the wholesale market and some other factors.
· On Wednesday 26th April E.ON’s standard dual fuel energy prices will increase by an average of 8.8%(2). Standard electricity prices will increase by an average of 13.8%. Standard gas prices will increase by an average of 3.8%;
· Around 38% (1.5m) of E.ON’s residential customers are unaffected. 62% (2.5m) of E.ON’s residential customers will potentially see an increase if they take no action before 26th April 2017;
· This is largely due to an increase of around 36% in the cost of supporting various social and environmental programmes, such as the Renewables Obligation (RO) and Electricity Market Reform (EMR), but E.ON has been able to partially offset some of these increases;
· E.ON has also announced today a number of measures to both shield potentially vulnerable customers from the impact of this increase and offer customers on standard variable tariffs an alternative to the increase through a fixed term product. E.ON has also flagged a series of interventions targeted at standard variable customers that it will make in 2017, to seek to encourage those customers to engage with the market and potentially choose an alternative tariff.
Commenting on the changes Tony Cocker, Chief Executive of E.ON UK said: “This is the first time since January 2014 that we have increased our standard variable prices. It is an announcement we never want to make but is due in large part to the fact that many of the costs we don’t directly control, such as policies including EMR, RO and the Energy Company Obligation (ECO), which are paid for via people’s energy bills, are increasing. We have been able to partially offset some of these rises through our wholesale hedging policy and other means, but we do have to make an increase.
“We will continue to work to make sure our customers are on the best tariff for them. For example we will be sending more than three million letters to customers this month with personalised savings messages making it clear how easy it is to swap to another tariff that might offer cheaper prices. In addition we will also be working to contact a number of potentially vulnerable customers currently on our standard variable tariff with a personalised quote for an exclusive product, which will be E.ON’s cheapest tariff.”
E.ON has also announced a series of measures which will further boost engagement with customers on standard variable tariffs:
· One stop switch: A letter to potentially vulnerable standard variable customers with a personalised quote for an exclusive tariff(3) which will be E.ON’s cheapest tariff. This letter carries a simple tear-off permission slip which can be signed and returned to E.ON, meaning the customer needs to do nothing else to switch to the exclusive tariff.
· Longer fix: The launch of a new two-year fixed tariff, E.ON Energy Fixed 2 Year v10, which allows customers to avoid the price increase, offering peace of mind that prices won’t change for 24 months(4).
· >3 million Energy Interventions in 2017: Over 3 million energy interventions will be made by E.ON in 2017. Targeted at standard variable tariff customers these will include, but not be limited to: innovative new tariffs, a ‘Could You Pay Less?’ campaign and bespoke potential savings information;
· Energy Direct: A trial programme is being developed which will aim to speak directly with customers. These conversations will take place in town centres to engage customers who may be less likely to respond to other methods, including those on a standard variable tariff with E.ON or another supplier.
· Smart meters: E.ON believes smart meters are a vital upgrade to the UK’s energy infrastructure and has installed almost three quarters of a million to customer properties so far. They will improve the experience for customers by helping them gain greater visibility of their energy use and spend and help bring an end to estimated bills as well as further improving engagement and enabling even easier and faster switching. E.ON is committed to getting smart meters into its customers’ homes and businesses so they can see the benefits for themselves.
Where does E.ON’s customers’ money go?
E.ON also provides clear information to its customers about where their money goes and the different costs which make up a bill. This information is updated annually following publication of the Ofgem Consolidated Segmental Statements.
Notes to editors
1 = E.ON last increased its standard variable dual fuel prices on 18 January 2014 by 3.7%. Standard gas prices fell by 3.5% on 13 January 2015 and 5.1% on 1 February 2016.
2 = Weighted average percentage increase to E.ON’s customers in each region across all payment types. Based on Ofgem average annual consumption of 12,500 kWh for gas and 3,100 kWh for unrestricted electricity, the standard variable dual fuel bill will be £1,144 a year with payment by fixed monthly Direct Debit when taking paperless bills, effective 26 April 2017.
3 = This tariff will shortly be made available to E.ON customers who are either in receipt of the Warm Home Discount or aged 65 years and over, and who have been on E.ON’s standard variable tariff for three years.
4 = E.ON Energy Fixed 2 Year v10 is priced at £1,047 a year for dual fuel customers paying by fixed monthly Direct Debit when taking paperless bills, based on Ofgem average consumption of 12,500 kWh for gas and 3,100 kWh for unrestricted electricity. It is available to dual fuel and electricity only customers across all regions with unrestricted or E7 meters.
For more information contact:
Scott Somerville (07889 771804)
Victoria Blake (02476 181304)
Roxanne Postle (02476 195785)
Andrew Barrow (02476 183677)
Jag Bickham (02476 181308)
Jane Branscombe (02476 183681)
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